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Deep Dive with Anthony Pompliano (Pomp), Managing Partner at Full Tilt Capital

posted 11 months ago

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Ben Tossell
If you were starting your career now, what would you be focusing on?
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Pomp
@bentossell Fundamental technology skills (computer science, data analytics, etc) and acquisition of soft-skills (leadership, empathy, storytelling, etc), while reading as much as possible on topics I was interested in. This is true for all stages of a career probably.

The specific areas that I think are interesting are AI/ML, crypto, life sciences & voice.
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Ben Tossell
What’s your advice for people who are just starting out in crypto?
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Pomp
@bentossell You're not "buying" - you're "investing."

You make decisions to buy things without much information on daily basis. You almost never make investment decisions without information. Crypto is no different.
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Pranay Srinivasan
How tempting is it to back a centralized blockchain?
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Mitchell Wakefield
What is the best piece of career advice you've received?

What career advice would you give to entrepreneurial-minded young people?
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Pomp
@wakefield00 Ben Smith gave me two pieces of advice when I moved to Silicon Valley:

1. Keep your personal burn rate as low as possible to preserve optionality.
2. You will be rewarded more for taking big swings at hard problems, than having small successes.

I didn't fully appreciate the quality of this advice at the time but routinely share it with others on weekly basis.
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nikhil srinivasan
What are the biggest compliance challenges around making or receiving capital via crypto (ie should KYC be a consideration for founders raising an ICO)?
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Pomp
@nvs Every team should adhere to the strictest guidelines possible (AML/KYC). The risk outweighs the reward if regulators disagree with your interpretation of the law. There are platforms that are making it easier for teams to do this (CoinList, Templum, tZero, Polymath, etc) so shouldn't be that big of a hassle moving forward.
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Alec Larson
What are your views on Venezuela's oil-backed cryptocurrency and Britain's gold-backed cryptocurrency?
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Pomp
@some_day_man Both are interesting experiments. No clue if they work but I commend both governments for trying something new. It will be interesting to see if citizens buy into participating in centralized token models that are run by the very governments that they are potentially weary of.
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Jason Yannos
How are you looking to express your tokenized securities thesis?

Do you think we'll see one (or a few) tokens/platforms, similar to what is Ether is to DApps, act as the predominant platform for tokenized securities or do you imagine a world thats much more sparse where not one (or two) winners take all?
1
Pomp
@Jyannos I think that most hard assets in the world will be tokenized at some point. The first areas I'm interested in are (1) investing in tokenized securities of companies (which I believe to be more beneficial for founders & investors) and (2) investing in tokenized securities backed by hard assets (cash-flowing real estate is the lowest hanging fruit probably).

I want to believe that there will be numerous winners in the tokenized security platform wars but it is more likely that there is only 1 or 2. These platforms are going to be less like equity in a single company and more like NYSE or NASDAQ - the winners will serve different purposes, assets or geographies.

The platforms with a head start are Templum, tZero, and Polymath. My understanding is Templum is the only platform to have successfully executed a SEC-compliant transaction but the others will be fast followers. Will be fun to watch this unfold over next 18-24 months.
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Erik Torenberg
What do you believe in crypto that others disagree with you on?
1
Pomp
@eriktorenberg The largest market opportunity in crypto is meshing the advantages of tokens with traditional finance markets. This will be most obvious in tokenized securities. Many of the hardcore crypto folks want to decentralize the world (and have a chance of accomplishing that) but majority of the "market cap" and wealth generation will happen surrounding hard assets and organization equity, not decentralized products / services.
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Erik Torenberg
Something you've recently changed your opinion on in the crypto space?
1
Pomp
@eriktorenberg I change my mind on topics fairly regularly. One of the biggest things I have changed my mind on is the process of evaluating investment opportunities. I use to think that crypto and early stage venture were drastically different & required different skills (technical code review, etc) -- now I see many parallels (great team, viable/useful tech that solves a problem, large market opportunity, lack of competition, etc). The truth is probably somewhere in the middle.
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Chenxi Cai
Tell us about your Italian heritage?
1
Pomp
@chenxicai1 Italians run the world. Everyone knows that ;)
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Pranay Srinivasan
Hey Anthony - Great to connect here as well!
Whats the sweet spot in a startup's progress for Full Tilt to invest, especially in crypto where white papers are the new "business plan".
Also how do you assess utility in tokens that startups are touting.
Thank you!
1
Pomp
@utekkare I think it is Mike Maples that says "I want to invest early or too early." I feel the same way about crypto investing. I'm looking for really strong teams that are building valuable technology to address a hard problem with large market opportunity (as is every investor in the world lol). Almost everything will change in the dynamic environment of early stage investing so I'm particularly focused on backing teams that I believe in & am inspired by.

Most teams are dreaming if they think they're not offering a security. My guess is 80-90% of the "utility" tokens being offered today actually qualify as securities according to the SEC / CFTC. Regulators will come down hard on a few folks and I would expect this behavior to be quickly curtailed.
1
Pomp
@utekkare @utekkare Yes but if a team ever wants to enter into the US, they should just take the necessary steps to be compliant from Day 1. Will save themselves a world of hurt later on.
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Pranay Srinivasan
@utekkare @APompliano That sounds legit. As long as the startup is US based. International is murkier, no?
0
Steven Zheng
What is one investment you missed out on?
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Pomp
@Dogetoshi It isn't in crypto but I saw StatMuse early on and was indecisive. They're going to end up as one of the hottest companies in the voice space (and have a large, attractive investor outcome). Luckily I've stayed good friends with Eli but watching as a friend is never as fun as watching as an investor :)
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Reknown
There's allot of capital in the crypto markets that hasn't been exposed to risk before. Do you anticipate push back from ICO victims and are these victims a threat to the system?
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Regan Bozman
What are your thoughts on the current tether controversy?
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Chenxi Cai
Which project do you think will most likely succeed as the scalable smart contract solution?
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Pomp
@chenxicai1 I don't think only one will succeed but obviously Ethereum has quite a head start. I've been impressed with Vitalik's willingness to stay vigilant, while also praising other teams where applicable.
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Alec Larson
Will the news of Telegram's App Store removal affect its ICO?
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Pomp
@some_day_man Normally I would say yes but we live in a such a crazy time that who knows at this point.
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Eli Sheets
What are your must-haves for a white paper? Do you recommend an alpha or MVP running before publishing? Do you have a page limit, or do you think longer white papers are better because they provide greater detail to potential investors?
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Pomp
@Sheets173 I think teams should create 3 documents:

1. Longer, more technical white paper explaining details
2. One or two page executive summary of white paper
3. Pitch deck

The extra time it takes to create everything can pay dividends when circulating materials to different stakeholders. You never know what someone prefers & the additional effort rarely goes unnoticed.
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Eli Sheets
@Sheets173 @APompliano Appreciate the advice, as always. Finishing up all three, so good to know you are of the mind that the extra effort is going to be worth it (though I'm going to go out on a limb and say that you probably don't advise against extra effort often). We should grab another coffee @ Morning Times sometime soon to follow up on our first and so I can hand you the WP for my newer venture in person (or executive summary, or deck of course haha).
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Alec Larson
Will profit-sharing with holders become more widespread because of a tokenized economy?
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Pomp
@some_day_man You are already seeing this become popular so I think it will only accelerate. Much of the crypto revolution is the mindset - people are looking for a solution that brings more equality, trust & transparency. Profit-sharing via tokens can accomplish all three.
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Alec Larson
Thoughts on starting a Shark Tank inspired web series for crypto projects?
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Pomp
@some_day_man @some_day_man This would be interesting too.
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Pomp
@some_day_man This would be interesting but may be hard to pull off given the more technical nature of many projects. You could probably focus on specific types of projects (consumer-facing) and avoid highly technical conversations too. Than again, there are plenty of people who would love to see heated debates over technical aspects of an ambitious project too.
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Alec Larson
@APompliano Agreed. Maybe it would be better to simply do fireside chats with famous crypto leaders as well as unknown crypto founders.
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Alec Larson
Do you plan on starting a Full Tilt hedge fund backed by a cryptocurrency?
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Pomp
@some_day_man No. I'm not a day trader and don't pretend to be one.

My core competency is investing in teams and technologies at their earliest stages. There is no reason for me to step outside that focus - plenty of professionals that serve that purpose and are very good.
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Josiah Gulden
Given your background in social, what do you see as the biggest potential implications of cryptoeconomics for social media platforms?
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Pomp
@jgulden Bitcoin is the greatest viral product ever created.
0
Pomp
@jgulden @APompliano I'm sure many of the social platforms are looking at tokens as potential currencies within their closed ecosystems (doubtful this works), while also exploring how blockchain technology can improve their operations.

It would be interesting to see a Facebook or Twitter launch a fully de-centralized copy of their platform. The idea of disrupting themselves would appear scary at first, but I'm sure they would figure out a way to make money off of it. Red Hat has built an incredible business monetizing open source software.
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Josiah Gulden
@APompliano interesting for sure. I keep wondering how tokenization could solve some of Twitter's biggest problems... verifying legitimate but anonymous identities behind each account, incentivizing against antisocial behavior, giving popular voices a way to monetize their following through microtransactions, reducing dependence on an ad-supported revenue model, etc. Are there any other perennial operational problems you see crypto as being uniquely positioned to solve?
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