Fund Structure and History

Fund Structure and History

This is a requested blog post and question we receive often, and figured it was a good time to officially break down the fund's structure and history. Since it's inception, Visary's fund structure has always been proprietary, in-house capital. Despite many inquiries over the years from various funds, family offices, and high net worth individuals to invest in the fund, we chose this path for a number of reasons, but first, will explain how the fund got to this point.

Early in my career, I worked for a company called Pentaho, which was a big data analytics startup built during the dawn of open-source data and parallel processing systems like Hadoop. I joined as one of the first business hires, and helped build out their go-to-market for about 4-5 years. I learned what someone would probably learn in 10 years in a typical business setting in an intense, consolidated period of growth. I am forever grateful for that. Pentaho ended up getting acquired by Hitachi for ~$600M. This was a substantial acquisition back then – before a lot of money supply and valuation bloat occurred in markets more recently.

While at Pentaho, I climbed the ladder and made a non-trivial amount of money at the time, including from vested equity. This was the first step towards a career in technology startups, and having extra capital for the first time in my life also helped me begin investing. I soon became enamored by markets and valuing and trading stocks. I put most of my net worth at the time into NVDA and AMD at around $4 and $2 respectively, and had a strong understanding of semiconductors and chip markets through countless hours of research (and being an avid PC gamer didn't hurt). After Pentaho, I worked a few other roles over the years building out technical sales teams and managing systems integrations teams and made good money, but couldn't shake my passion for markets and investing.

In late 2015, I got into crypto, and the rest is history. I went down the rabbit hole and crypto offered me something new, at the right time in my life. Philosophical alignment via the deep appreciation I had for open-source technology and open data, Libertarian and free market ideals, and the feeling of being involved in something extremely nascent and untapped. I bought my first Bitcoin in 2015, and ended up going all-in throughout 2016, including into Ethereum shortly after it's launch.

Through 2016 and 2017, I did everything imaginable in crypto. I setup mining rigs at home for coins like Monero and Vertcoin. I also participated in some ICOs because I found it to be such a unique way to raise money globally (some of which had surprisingly huge returns, despite being total experiments). I was a homegrown retail investor and trader through and through, and began experiencing rapid growth in just a few short years. In 2017, I was managing a P&L for a data consultancy, still making good money in a comfortable, secure job, but saw my portfolio take off to new heights in parallel. I was still plugging all my savings and bonuses into crypto, but the day job slowly stopped mattering.

Having traded stocks for a couple of years prior and experiencing various horror stories and learning the hard way, I knew that at some point I had to begin selling these gains and de-risking. Through the summer of 2017 and into 2018, I sold the majority of altcoins I had (e.g. things like Monero, Verge, and ICON to name a few) and left all my Bitcoin and most of my Ethereum in cold storage, as I actually believed in those (and still hold many of those original positions). In hindsight, I obviously didn't time the top that cycle, but having sold through a period of ~6 months when most things were up 50-100x, I walked away in a very good position to say the least. In early 2018, I left my job and launched Visary Capital. Our first 2 investments were technically in 2017 – in Blockstack (now Stacks) and Filecoin, which both turned out great, but the fund officially launched in January 2018.

This fund is completely homegrown from savings, trading, and investing my own capital in both traditional markets and crypto over about a 6 to 7 year period. Everything has been self-taught over years of research, trial and error. From 2018 to 2022, during the last bull cycle, the crypto fund managed to grow ~40x through a mix of active buying through the bear market, various early stage token investments, and exits. This has brought us to the point of being able to do a lot more venture and carve up some liquidity and manage risk and time preference a bit differently. Given my roots in building early go-to-market teams in startups, venture was always a natural addition, which really began in 2019 (with a few exceptions) but has become more substantial year over year.

The fund is now structured approximately 66/33, where 2/3rds of the fund is liquid (active crypto positions) and semi-liquid (vesting crypto positions), and 1/3rd of the fund is illiquid venture equity. We don't expect to go much beyond this ratio, as we want to stay true to the roots. We believe the fund is unique not just because of it's from-the-ground-up, entrepreneurial history, but also because of understanding liquidity and market structure better than "crypto VCs" – and don't really consider ourselves VCs in a typical sense. We are active market participants, do'ers with hands-on go-to-market experience, open-source advocates, early project contributors, and we also use many of the products we invest in.

LP fund structures are crucial for any market's growth, and we work with many LP funds. However, not having LPs also comes with many benefits. We are low bureaucracy and highly flexible in rounds. Our due diligence process is unique given our only focus is on aligning with Founders, not pleasing LPs. We respect and prioritze a Founder's time more than anything. Many funds wax poetic about being "Founder-first" but reality plays out differently. Our skin in the game is directly aligned with Founders at all stages. These factors have allowed us to maximally focus on a few key things:

1) Talent Network: In-house talent sourcing for both BD and software development roles, working with our third-party hiring network, and partnering with Turing to support remote engineering hiring.

2) Customer and Community Growth: Hands-on business development, early stage go-to-market, building out sales processes, messaging, and direct outreach.

3) Strategic Capital: Helping raise subsequent rounds through our syndication/fund network. We've helped source over $40M of additional capital for our startups, which is tailored based on value-add, along with helping form and fill out the rounds we participate in.

The fund structure also allows us to move rapidly in crypto (which is important) and do things like deploy into certain narrative shifts, buy undervalued tokens, add to our existing vesting positions in the liquid market, provide liquidity to our early investments, yield farm (circa 2020/21), actively stake/orchestrate, and run nodes.

The direction we want to take the fund is now towards more in-house resources for talent, design, product, and go-to-market – a holistic "Visary Labs" approach, where we even build some products around data and analytics for example. We expect more of this to materialize in 2023 as we hire for these roles, and believe we can achieve this as the fund continues scaling, without the need for LPs. More to come on this!

Are we completely closed to LPs forever? Not necessarily, but we would be highly selective and partner with one or two tight-knit LPs instead of a large group. If you are an LP who believes you align with the fund and wants to hear more about the fund's AUM, performance and plans, we are always open to discussions. With that said, we've turned down all investors as of today. On-top of all the benefits on the investing and business side, it is also a personal and life choice. The setup this fund has achieved is rare, and no matter what anyone says, bringing in outside capital changes everything. Nothing has been more fulfilling than working with Founders in this way, and also being 100% autonomous and in charge of your own time and destiny.

We are excited to expand the team out into 2023 and continuing to partner closely with Founders and being activist market participants. The rise of proprietary, Solo GP and 'Solo Capitalist' funds has been legitimized over the years and we expect many of them to outperform traditional funds.