Think like a Venture Capitalist in the Cryptocurrency Market

Those who are crystalizing their losses right now (selling when the market is down) need to realize that you are Venture Capitalists. Crypto is essentially democratized venture capital.

That means you have a power and a responsibility. You need to channel your inner VC right now, or you dont belong at this stage of the market.

Imagine if Silicon Valley Venture Capitalists exited their startup investments whenever the founders had a bad press release, or (gasp) a missed release date or milestone.

Tesla would not exist, nor would Apple. Pick a startup you love, and I bet you I can find a battle story you didn't know.

Silicon Valley would die in a handful of years without the support of ride or die Venture Capitalists. The kind of VC that doubles down when it counts. The startup ecosystem, of which you are now a part, relies on your shrewd investment decisions and your resolve to see those investments through, even during the bloody times.

The best Venture Capitalists complete their due diligence, deploy capital, and because they know their startups have the right team, product, and traction to disrupt a $1b+ market, they ride or die.

So if you are an investor and didn't realize that you are now a venture capitalist, here's the shorthand on what you need to know:

1. Many of the rules for the stock market dont apply in the crypto realm. ie) Insider information is not only NOT penalized, it is your OXYGEN. You better figure out what the fuck is going on at the companies you are investing in.

What companies are they hiring from?

How good is their product/service...don't tell me just try it.

Whats their market dominance relative to their competitors? Have you done due diligence on their competitors? Are you a crypto baller? Whale? Why not meet with their head of business development and ask these questions?

What do they value? What's the culture like?

What's it like to have a beer with their VP of Sales?

Where do their employees hang out? You might just have a free night when you're in town...

1. EPS, P/E ratio, and other stock market fundamentals are in many instances, irrelevant here.

Team, product, traction, brand, those are your fundamentals in cryptohodlerlandia.

1. If you don't know what due diligence means or you spell it like 'do diligence', you my dear friend need to self-educate, or you are going to get REKT by people who know how early stage investing works.

2. The only way to learn due diligence in investing is to try doing it. Sound hard? Not really....

Look at early slide decks of top startups and try to identify the magic that made them great. Make your OWN rubric. Then apply that rubric to your current portfolio and backtest it. Then readjust when price and volume dynamics support a portfolio rebalance (sell those that dont fit your rubric when the price is favorable).

Where to look? Included is a link to some of the famously awesome early stage pitch decks in Silicon Valley to facilitate your self-education. http://onboardly.com/startup-pr/best-startup-pitch-decks-of-all-time/

Bonus Fact: In Industrial Psychology there is a strategy called Concurrent Validation. It's when you retrospectively analyze data on successful examples of companies or people and then make a grading scale to predict future performance.

This gives you a concurrent validity index, or a parameter used in sociology, psychology, and behavioral economics to predict human/company performance and price action.

1. When the market corrects, apply your new rubric ruthlessly to take profits and exit positions that don't meet your due diligence threshold.

2. A big advantage you have here over traditional venture capitalists is that you have liquidity. Use it wisely.

Thanks and please follow and upvote for more.

@crypto-moon