startups that aim to become the next big thing in crypto technology. This program, later rebranded as the Crypto Startup Accelerator (CSX), has evolved into a comprehensive curriculum akin to Y Combinator, offering participants $500,000 in funding, a 10-week educational program, and access to a16z’s resources in exchange for equity. The latest cohort includes founders from 25 selected startups.
The group, predominantly male and ranging in age from their twenties to over fifty, arrived dressed similarly in hoodies or patterned t-shirts paired with jeans. Some were relaxed, casually discussing over fresh fruits or croissants from a breakfast stall, while others remained quietly on the sidelines.
As an outsider, I piqued the curiosity of some attendees. Introducing myself as a journalist, I noticed a few tense up. “Should I worry you might report on this?” one founder half-jokingly remarked. Nevertheless, most seemed pleased to have someone interested in their work.
The founders also assessed each other, comparing their capabilities in the crypto field. Some were newcomers, but many had deep knowledge of crypto’s language, intricacies, and history. One founder claimed to be the first to use a Bitcoin ATM in London, while another started trading crypto futures at seventeen. Technical analyses of their projects were discussed with geeky enthusiasm. “I hear he’s a real guru,” another said, referring to an a16z partner assigned as their mentor.
Soon, the group was led to a room behind a16z’s office, which would serve as their classroom and lecture hall for the next ten weeks. Rows of long and high tables faced a stage adorned with the blue and black CSX logo. Jason Rosenthal, a16z’s Operating Partner and head of CSX, took the stage.
Almost all major venture capital firms—from Sequoia Capital and Accel to Greylock and Lightspeed—have invested in crypto startups to some extent. However, a16z stands out in its belief and investment in this industry’s potential to redefine the era’s software enterprises. “Each of us has an opportunity to build a once-in-a-lifetime tech franchise,” Rosenthal told the audience. “We are very confident that companies will soon occupy that position in this new field. The seeds are being planted today.”
a16z, founded in 2009 by Marc Andreessen and Ben Horowitz, is renowned for its investments in companies like Facebook, Instagram, Airbnb, and Slack. In 2018, a16z shifted focus to the cryptocurrency sector, raising over $7.5 billion through four specialized crypto funds. Despite setbacks, including investments in failed projects like Diem and Basis, a16z remains optimistic about substantial returns.
While recent developments in the crypto industry have been mixed, a16z continues to champion its potential. The CSX aims to fuel early-stage crypto startups, distinguishing those committed to technology beyond money laundering and financial speculation. “The downturn in the crypto market effectively pushed speculators—those looking for quick profits—towards AI,” Rosenthal explained. “Those remaining are the hardcore tech experts truly dedicated to this field, as reflected in our selection process.”
Despite Rosenthal leading the CSX initiative, the team echoes the views of a16z partner Chris Dixon, who leads the company’s crypto efforts. In his book “The Ownership of Reading and Writing,” published in January, Dixon outlines his vision for crypto technology as a foundation for a fairer internet. According to Dixon, blockchain—the digital ledger behind crypto networks—can wrest control from profit-driven guardians, potentially returning the internet to its egalitarian roots.
a16z’s London office, located on the sixth floor, was initially sparse weeks before CSX began. Now, it’s stocked with energy bars, beef jerky, and low-calorie sodas. Recommended reads line the shelves: Peter Thiel’s “Zero to One,” Horowitz’s “The Hard Thing About Hard Things,” and of course, Dixon’s latest.
Upon my return weeks later, the excitement of the first day had given way to a studious atmosphere. Founders were heads down in the office, laptops open, AirPods in, waiting for classes to begin. They were fully immersed.
Throughout the program, lectures from Rosenthal, other a16z personnel, and founders of other a16z-backed ventures like Houseparty creator Ben Rubin, provided pearls of wisdom on topics ranging from hiring (“Don’t dilute equity too early”) to layoffs (“Killers want to be with other killers”) to enduring hardships (“When you’ve chewed enough glass, you learn to love the taste of your own blood”). Yet, the curriculum centered on understanding cryptoCryptocurrency programs sometimes feel like opening a window to another world. Instead of scrolling on their phones, people quietly inspect code logs. The jargon of Silicon Valley startup culture — “zero to one,” “product-market fit,” “embrace the challenge” — is layered with even more cryptic terms: danksharding, delay functions, and zk-SNARKs. “If you really want to impress a cryptographer, ask them about the survival of lattice assumptions,” joked one speaker. Everyone chuckled, but I didn’t get it.
Though some founders hail from Europe and beyond, a sizable portion are American. During an ice-breaking session, a founder from Texas expressed concerns about the quality of corn tortillas in London. Another, who had spent time in the city, confirmed his worries were justified.
Whether for affect or genuine hunger, group members embodied the stereotypical image of overworked, sleep-deprived founders. During lunch one day, I asked a founder if he made time for sightseeing. He gave me a puzzled look; explaining he’d been burning the midnight oil at his desk throughout CSX.
The software developed by startups in this accelerator program falls into three categories: consumer-facing applications, enterprise services, and foundational technology infrastructure relied upon by other cryptographic software. Fewer companies prominently feature cryptography in their self-introductions — visiting their websites might not indicate any connection to cryptographic technology — yet each utilizes it behind the scenes.
AminoChain, for instance, offers a solution where patients earn royalties by providing biopsy samples for medical research, while providing hospitals a platform to store and distribute these underutilized samples. Roux transforms recipes into collectible NFTs, aiding chefs and food bloggers in monetizing their content without littering recipe pages with ads and SEO. Valyu Network turns data used to train AI models into tokens, establishing a system for licensing and tracking information sources to combat copyright misuse.
Founders of these startups cite a mix of a16z’s internal crypto engineering expertise, resources, and network as reasons for joining. Like any accelerator program, they seek assistance in designing product elements and legal or regulatory advice. They also hope to leverage a16z’s connections in the crypto industry to introduce potential employees, policymakers, and other investors. At the start of the program, startups are divided into teams and assigned an a16z partner as a mentor, leading what founders call “group therapy sessions.” “One aspect of self-selection in accelerators is admitting you need help — and wanting experienced people to provide it,” noted a16z partner Elizabeth Harkavy, who has guided one such group.
While comprehensive firms have been backing out, a16z continues investing in the crypto sector, which attracts crypto founders in itself. In the past year alone, alongside CSX, a16z has added nine new crypto startups, joining established names like Coinbase and OpenSea in its portfolio. Lisa Grimm, co-founder of Roux and a veteran in hospitality, stated: “Roux straddles consumer and crypto. It’s crucial for us to find partners who understand this balance, and a16z clearly does.”
Despite millions owning cryptocurrencies in some form today, crypto-based applications beyond trading have yet to see substantial development. Dixon argues this technology is nearing a tipping point, citing advancements in infrastructure allowing faster networks and lower transaction costs, enabling practical, broadly appealing applications. “Imagine if in 2006, every time you clicked on someone’s Facebook profile, you had to pay a dollar. That just wouldn’t fly,” Dixon remarked. “At that magical moment, transaction costs became so low you could subsidize users, making it effectively free for them.”
Though the latest batch of CSX participants may be among the first to benefit from this “magical moment,” they enter the market amidst skepticism over the technology and unproven potential. One startup reported encountering doubts when discussing the technology behind their product with potential clients. “It’s a chicken-and-egg problem — this cohort has to deal with that,” Dixon observed, hoping these founders can help dispel cryptocurrency’s stigma.
Dixon admitted uncertainty about how long this process would take. “But at least now it feels like we’re in the right labyrinth of thought,” he said, “because you can do things now that were previously impossible.”
On the final day of June’s CSX — Demo Day — founders delivered brief pitches to a packed room of investors. a16z selected a glittering underground venue on the edge of SoHo, typically used for live music and club events. A balcony overlooked a ground space surrounded by floor-to-ceiling neon lights. A cinema-sized screen and sound system framed a stage where founders presented.
Arriving to booming electronic music, I observed a founder introducing his project to a coat-check attendant with a polite smile. Those leaving the pitching to their partners congregated at the bar, while others searched for investor conversations.
Announcements blared from speakers, signaling the start of the presentations. A jesting investor remarked, “Seating’s arranged like a comedy club.” After opening remarks by Dixon and Rosenthal, pitches began.
Each founder had a few minutes. As one presented, the next adjusted the mic on stage, taking deep breaths to steady themselves. One founder stated waiting was the worst part. The youngest founders rehearsed their lines too proficiently, but most spoke confidently. Clearly instructed to explain technical terms concisely, their messages were designed to stick in potential investors’ minds. Caspar Barnes, co-founder of AminoChain, pleaded at the end of his pitch, “Join us in our quest to bring trust to science and medicine.”
Investors scribbled notes as founders pitched. Some nodded in agreement or whispered behind their hands. During breaks, they joked about staking claims on the most promising projects. About forty investors attended in person, representing firms like Accel, Foundation Capital, and Amex Ventures.
Many founders hoped to raise funds following Demo Day. Rosenthal anticipated a16z would further invest in some of these companies, as they’ve done in previous CSX projects, while others would seek alternative paths.
The real “chase” came after the presentations, at a cocktail lounge decorated like a traditional Chinese courtyard. When I arrived, it was packed. The most confident founders were already shaking hands under blooming cherry blossoms, making introductions. Others seemed unsure of what to do, either sticking together or pacing the room with drinks in hand. I didn’t envy them.
The scene brought to mind Rosenthal’s earlier statement at the program’s start: “Most people probably shouldn’t start companies, because it’s hard — it’s painful. Gosh, if there were a way around that, I’d have found it.”
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Tags:
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Source Link:
https://www.wired.com/story/inside-a16zs-boot-camp-for-crypto-startups/
Explanation: All Bitpush articles represent the author’s views and do not constitute investment advice.
Original Article Link:
https://www.bitpush.news/articles/6916622
