NFT-focused funds find parallels to traditional venture investments

NFT-focused funds find parallels to traditional venture investments

Spencer Ventures, a crypto fund that focuses exclusively on NFTs, has decided to get out of the stealth mode after receiving a check for $ 10 million over $ 4 million from a family office.

Blockworks spoke with the founder and fund manager Spencer Gordon-Sand about what it takes to put on a fund that is aimed at institutional investors in the Baisse.

At the height of the Hausse in November and December last year, Gordon-Sand advised his investors to sell a large part of their portfolio and to wait for the right moment to buy back.

Now the 30 individual investors, who mainly come from Chicago and the Middle West of the United States, have together applied $ 4.5 million, he said.

Institutions that want to increase their commitment to digital assets turn to NFTS, said Gordon-Sand, while most of the top funds, such as those of Grayscale or Galaxy, offer only an engagement in ether or Bitcoin.

"For me, the first really convincing thing outside the nuclear technologies of Ethereum and Bitcoin, where I see how people build real companies and create real value", in contrast to other alternative cryptocurrencies or defi, he said.

Gordon-Sand added that he saw an appetite for the venture aspect of crypto-native companies-NFTS and decentralized autonomous organizations (DAOS)-from the institutional family office area, investors who may have difficulty finding ways to use capital.

Gordon-Sand has been a risk investor in the past ten years and has worked up to the partner of the VC company Lofty Ventures. There he founded a venture syndication practice that is aimed at accredited investors who are curious about fishing investments.

"one of the reasons [institutions] have invested in me," said Gordon-Sand, "because they don't really want to deal with keeping these assets in their own balance sheets" due to the increased internal and legal taxes that have most family offices.

Gordon-Sand's greatest ability seems to be timing. His biggest purchases include a rare cosmic moonbird NFT, which was bought three hours before the 50 million dollar financing of the parent company of the project, proof Collective, Announcement at the end of August.

He also bought a laser-eyed bored ape yacht club (BayC) nft for 133 ETH. He said that he used Ether, which was bought after the FED session on Wednesday for $ 1,227, which corresponds to a total of around $ 163,000.

laser eyes are one of the rarest properties of a bored monkey, and during the house they tended to be traded three to five times the minimum price. Gordon-Sand bought his when the floor was 70 ETH, while the cheapest BayC NFT is currently being offered on Openea for 80 ETH.

He also bought "a bunch" Mutant Ape Yacht Club and other BayC NFTS during the Benddao liquidation fear.

The cryptopunks in his portfolio were bought "for culture".

"People see how I buy punks, know that I have liquidity and send me a message if they want to sell interesting grails that are more difficult to move," said Gordon-Sand. (Grails is colloquially for a coveted object.)

The strategy of Spencer Venture is to look at highly liquid collections for entry and exit. By usually taking over larger positions, he treats the company like a venture capital fund.

"This is the cool thing about NFTS. It is a kind of risk investment, but you can actually shorten positions, manage liquidity differently and actively control the risk," said Gordon-Sand.

he compares the market capitalization of NFTs with that of private market reviews from startups. Yuga Labs, for example, was rated $ 4 billion in March in March-an evaluation that is usually seen by listed companies.

nfts are relatively illiquid, but that can be an advantage, said Gordon-Sand.

"To be liquid in an illiquid market is the way to the best deals," he said, adding, "In bear markets, the value multipliers for rare assets drop towards Floor-Assets, which I see as an opportunity for someone with a longer period of time."

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The post-NFT-focused fund finds parallels to traditional risk investments is not financial advice.