Jason and Darryl introduce Tangent, a crypto fund, and discuss its growth and team.

Introduction to Tangent

Jason and Darryl discuss the formation of Tangent, their meeting, and decision to start the fund together.

Formation of Tangent

Jason and Darryl explain the concept of an evergreen fund and its alignment with their investment philosophy.

Tangent's Evergreen Fund Model

Jason and Darryl outline their investment thesis, focusing on 0 to 1 innovations, market for everything, and coordination networks.

Tangent's Investment Thesis

Jason and Darryl share success stories and discuss the complementary nature of trading and long-term investing in the crypto space.

Success Stories and Trading Strategy

Discussion on the importance of complementary skill sets and delineated rules in crypto fund management.

Complementary Skill Set in Crypto

Exploration of fundamental bets on Stacks, AKT, and Ron, emblematic of the 3 biggest verticals in crypto.

Long-Term Fundamental Bets

Insight into the decision-making process for buying Stacks, AKT, and Ron, based on the analysis of crypto's potential in AI, gaming, and coordination of resources.

Decision-Making Process for Crypto Investments

Discussion on the decision to invest in Stacks, based on the team's familiarity with the project and the Nakamoto upgrade.

Investment in Stacks

Explanation of the decision to invest in Akash, driven by the observation of organic growth and establishment of a relationship with the team.

Investment in Akash

Insight into the decision to invest in Ronin, driven by the belief in the potential of GameFi and the team's understanding of building a gaming ecosystem.

Investment in Ronin

Discussion on the value of distribution in crypto, with a focus on Ronin's distribution strategy and user reactivation.

Distribution Play in Crypto

Insight into the ETHBTC trade, including the rationale behind the trade and the impact of the ETH ETF approval.

ETHBTC Trade

Discussion on the evaluation of the ETH investment, considering market sentiment, rejection pricing, and option value.

Evaluation of ETH Investment

Exploration of skepticism towards ETH investment, considering the complexity of the tech bet and mainstream permeation.

ETH Investment Skepticism

Insight into the fundamental bet on Roebit, the challenges faced, and the conflict between fundamental investing and liquidity aspects.

Fundamental Bet on Roebit

Discussion on the philosophy of structuring the Tangent team and the importance of complementary skill sets and values.

Structuring the Tangent Team

Insight into the investment process at Tangent, including the focus on spot, trading, and venture timeframes.

Investment Process at Tangent

Exploration of the types of attributes sought in candidates for scaling the Tangent team and the importance of a strong independent view in crypto.

Scaling the Tangent Team

The importance of mid-trend investing and catching hockey stick growth in crypto and general investing.

Understanding Trends and Investing

The goal of venture investing, pre-positioning ahead of trends, and navigating timeframes in crypto investing.

Venture Investing and Navigating Timeframes

Recognizing different phases of the parabola in investing, and the importance of staying self-aware.

Recognizing Different Phases of the Parabola

Implementing a dot collection system for analysts to track progression and skill traits in the team.

Dot Collection System for Analysts

The significant impact of ETF on capital inflows and changing market sentiment in the crypto market.

ETF Implications for Crypto

Analysis of the Bitcoin market, consolidation range, and the need for positive development for a trending market.

Bitcoin Market Analysis

Understanding the implications of AO as an AI coin and its potential in the market landscape.

AO and AI Agent Meta

The process of becoming co-founders, building trust, and the importance of shared values.

Becoming Co-Founders

Handling disagreements, introducing the concept of vetoes, and making decisions in investing.

Disagreements and Decision-Making

Discussion about personal disagreements and bearish sentiment in the crypto market.

Disagreement and Bearish Sentiment

Importance of graceful exits in early investments and the negative impact of killing project prices during exits.

Graceful Exits in Investments

Discussion about a significant loss in crypto investments and the impact of holding GameFi tokens.

Biggest Loss in Crypto

Strategies for analysts to differentiate themselves, including being active on social media and exhibiting competitive spirit.

Differentiating as an Analyst

The importance of broadening knowledge outside of crypto and methods for continuous self-education.

Continuous Self-Education and Growth

- In early 2024, Solana broke $100 and was predicted to cool off, but Tangent had an aggressive view that it would reach $200.
- Tangent is an evergreen fund that invests across all stages of a crypto company's lifecycle.
- The fund started with a mentorship model, co-investing with founders of protocols, but later transitioned to a more casual relationship due to capital constraints.
- The evergreen fund model allows Tangent to support protocols and companies at every stage, from pre-seed to liquid markets, providing comprehensive support.

- The speaker discusses the challenges of venture funding in the crypto space, particularly with the focus on fair launch and low float opportunities.
- They emphasize the importance of employee-owned funds and the alignment of incentives in investing.
- They highlight three main categories of investments: 0 to 1 innovations, market for everything, and coordination networks.
- They also mention their involvement in NFT investments through a fund managed by an expert in the space.

- The speaker discusses their investment in MemeLand, a social community focused on coordinating around one coin
- They also mention their investment in Amino Chain, a blockchain coordinating biobanks
- They talk about their successful market calls, including their investment in Solana and other altcoins
- They highlight their ability to play both the long-term investment and trading games in the crypto market, and the importance of monitoring on-chain activities and user attention.

- The speaker discusses the strategy drift in crypto investing and the complementary skill set they have in their fund
- They give examples of successful bets on Stacks, AKT, and Ronin, based on their analysis of the gaming and AI verticals in crypto
- They also talk about their successful ETHBTC trade, which was initially doubted but turned out to be profitable
- The focus is on longer-term thesis-driven plays and the importance of distribution in the crypto market

- The speaker was initially skeptical about Bitcoin and Ethereum due to the confusion and complexity surrounding ETH
- They discuss their investment in Roebit, a gambling platform, which did not yield the expected returns due to lack of liquidity and market timing
- The team is structured to handle venture investments, lower time frame trading, and spot book management
- They hold investments for long periods, do not engage in short-term flipping, and re-evaluate their investments regularly to adapt to market narratives and opportunity costs.

- The speaker discusses their approach to managing spot and trading books, focusing on market narratives and opportunity costs
- They emphasize the importance of hiring a diverse team with complementary skills and values
- The team uses a quiz to identify individual strengths and weaknesses, creating a well-rounded team
- They also discuss the importance of post-mortems and principles in decision-making
- In terms of venture investments, they prioritize long-term relationships with founders and provide hands-on support
- They emphasize the importance of having a strong independent view and being malleable in one's perspective in the crypto industry.

- The ability to be malleable in your views and to spot trends early is crucial for successful investing
- The ETF is a significant factor in the current market cycle, attracting larger pools of capital and changing market sentiment
- Understanding the undercurrent of ETFs and reasoning from first principles is important for successful investing in the current market cycle

- In early 2024, Solana broke $100 and was predicted to cool off, but Tangent had an aggressive view that it would reach $200.
- Tangent is an evergreen fund that invests across all stages of a crypto company's lifecycle.
- The fund started with a mentorship model, co-investing with founders of protocols, but later transitioned to a more casual relationship due to capital constraints.
- The evergreen fund model allows Tangent to support protocols and companies at every stage, from pre-seed to liquid markets, providing comprehensive support.
- The speaker discusses the challenges of venture funding in the crypto space, particularly with the focus on fair launch and low float opportunities.
- They emphasize the importance of employee-owned funds and the alignment of incentives in investing.
- They highlight three main categories of investments: 0 to 1 innovations, market for everything, and coordination networks.
- They also mention their involvement in NFT investments through a fund managed by an expert in the space.
- The speaker discusses their investment in MemeLand, a social community focused on coordinating around one coin
- They also mention their investment in Amino Chain, a blockchain coordinating biobanks
- They talk about their successful market calls, including their investment in Solana and other altcoins
- They highlight their ability to play both the long-term investment and trading games in the crypto market, and the importance of monitoring on-chain activities and user attention.
- The speaker discusses the strategy drift in crypto investing and the complementary skill set they have in their fund
- They give examples of successful bets on Stacks, AKT, and Ronin, based on their analysis of the gaming and AI verticals in crypto
- They also talk about their successful ETHBTC trade, which was initially doubted but turned out to be profitable
- The focus is on longer-term thesis-driven plays and the importance of distribution in the crypto market
- The speaker was initially skeptical about Bitcoin and Ethereum due to the confusion and complexity surrounding ETH
- They discuss their investment in Roebit, a gambling platform, which did not yield the expected returns due to lack of liquidity and market timing
- The team is structured to handle venture investments, lower time frame trading, and spot book management
- They hold investments for long periods, do not engage in short-term flipping, and re-evaluate their investments regularly to adapt to market narratives and opportunity costs.
- The speaker discusses their approach to managing spot and trading books, focusing on market narratives and opportunity costs
- They emphasize the importance of hiring a diverse team with complementary skills and values
- The team uses a quiz to identify individual strengths and weaknesses, creating a well-rounded team
- They also discuss the importance of post-mortems and principles in decision-making
- In terms of venture investments, they prioritize long-term relationships with founders and provide hands-on support
- They emphasize the importance of having a strong independent view and being malleable in one's perspective in the crypto industry.
- The ability to be malleable in your views and to spot trends early is crucial for successful investing
- The ETF is a significant factor in the current market cycle, attracting larger pools of capital and changing market sentiment
- Understanding the undercurrent of ETFs and reasoning from first principles is important for successful investing in the current market cycle"""

- The speaker emphasizes the importance of reasoning from first principles and not blindly following market trends
- They discuss the current view on Bitcoin, predicting a wide chopping range and the need for a positive development to enter a trending phase
- They also mention their early investment in Arweave and the potential of the new L1 technology, AO, for AI agents
- The speaker expresses the need for a fair launch and the market's preference for fully circulated tokens without aggressive investor or team unlocks

- The speaker believes that AO can capture a part of the AI market and be a market leader for both mind share and price appreciation
- They believe that AO can provide a fresh idea in the AI landscape
- The speaker and their co-founder decided to work together based on trust, shared values, and complementary skill sets
- They recommend taking time to get to know a potential co-founder before committing to working together
- The biggest disagreements between the speaker and their co-founder are related to investment positions and book net, but they have no major disagreements on principles or ethics.

- The speaker introduces the concept of vetoes in their decision-making process
- They discuss their different approaches to investing, with one being more bearish and the other more bullish
- They share a personal story of losing a significant amount of money on GameFi tokens
- They outline the qualities they look for in analysts, including independence, competitive spirit, and founder referrals
- They emphasize the importance of being active in the crypto community and systematizing luck in investment decisions

- The speaker emphasizes the importance of having a social presence in the crypto investing landscape to get noticed.
- They discuss the importance of continuous education and growth outside of crypto, such as listening to long-form podcasts and investing in funds unrelated to crypto.
- The speaker also mentions internal knowledge sessions where the team shares unusual experiences and engages in left-field conversations to keep their brains fresh.

- Emphasis on reasoning from first principles and avoiding blindly following market trends
- Predictions for Bitcoin's future and potential of new L1 technology, AO, for AI agents
- Importance of fair launch and fully circulated tokens in the market
- Belief in AO's potential to capture part of the AI market and provide a fresh idea
- Importance of trust and shared values in co-founder relationships
- Different investment approaches and personal story of losing money on GameFi tokens
- Qualities sought in analysts and importance of being active in the crypto community
- Emphasis on continuous education and growth outside of crypto and internal knowledge sharing sessions.

Welcome to 'On a Tangent' episode 1 , a special segment of Blockcrunch!

Jason and Darryl, the co-founders of prop crypto fund Tangent, sit down to discuss:

- How Tangent began
- Tangent’s investment strategies that led to top percentile returns since inception 
- Biggest wins and losses
- Trading vs venture investing
- How to succeed as an Analyst

And much, much more

Host: Jason Choi @mrjasonchoi . Not financial advice.
--
Timestamps:
(00:00) Introduction
(01:19) What is Tangent Ventures?
(08:22) What is an ‘evergreen fund’
(10:09) Angel, Venture, LP, and Liquid investing 
(10:00) Employee-owned
(13:59) Crypto investment categories
(16:00) NFT investing strategy 
(18:30) Coordination networks 
(21:02) Tangent’s thesis categorization 
(21:54) Tangent’s big wins
(27:10) Trading vs venture execution 
(29:49) Stacks: Bitcoin L2 & Ronin: Web3 Gaming
(35:38) ETH/BTC
(40:46) Investing mistakes 
(47:15) Investment process & team structure
(1:03:03) ETH ETF implications
(1:10:15) BTC thesis 
(1:14:19) Arweave thesis
(1:21:20) Q&A
(1:31:34) Darryl’s biggest lose in crypto
(1:33:27) Succeeding as an Analyst 
(1:38:20) Continuing to learn 
(1:43:12) Outro
--
Twitter accounts:
Jason Choi’s Twitter:
https://twitter.com/mrjasonchoi

Darryl Wang's Twitter:
https://x.com/0xWangarian

Blockcrunch Twitter:
https://twitter.com/theBlockcrunch
--
Blockcrunch VIP:
 https://blockcrunch.substack.com/
--
Disclaimer:
The Blockcrunch Podcast (“Blockcrunch”) is an educational resource intended for informational purposes only. Blockcrunch produces a weekly podcast and newsletter that routinely covers projects in Web 3 and may discuss assets that the host or its guests have financial exposure to. Views held by Blockcrunch’s guests are their own. None of Blockcrunch, its registered entity or any of its affiliated personnel are licensed to provide any type of financial advice, and nothing on Blockcrunch’s podcast, newsletter, website and social media should be construed as financial advice. Blockcrunch also receives compensation from its sponsor; sponsorship messages do not constitute financial advice or endorsement.
Full disclaimer:  https://blockcrunch.substack.com/about

This was somewhere at the start of 2024, where Solana was breaking $100.

People saw it go 10x and people were saying how it needs to cool off.

We took the pretty aggressive view that Sol would have a push to $200.

At the time, I don't think many people shared our sentiment.

And we were pretty cognizant of this and we realized that there were still very strong fundamental drivers of why Solana would continue to receive flows.

And so we put on a pretty aggressive long on Solana at about $110, which we initially took off at about $190.

Welcome to On a Tangent, a special segment of the Blockcrunch podcast.

Now, about 2 years ago, my friend Darryl and I left 2 of Asia's most successful crypto funds to start investing our own capital, and we called ourselves Tangent.

And since January, 2023 to May, 2024, We've about quadrupled our investing capital and also assembled a team of some of the sharpest people in crypto.

So a lot of people are curious about what we've done and what we're doing.

So we wanted to do a little bit of a recap and overview of the tangent story so far.

So if you're a young analyst or an investor out there looking to join us, or if you're a founder who's looking for a truly crypto native team to work with, or you're just interested in our market views, make sure you make it through the episode.

So this here is also an experiment, as you notice we usually don't do these in a studio, but if you enjoy this episode, comment on YouTube, or let us know on Twitter so we know whether to keep this coming as either a monthly series or periodic series but without further ado here is the first on a tangent with my co-founder and good friend Darryl Wang and before we get started nothing we discuss is financial advice welcome to the show once again man.

How's it going I see you every day but obviously this time it's a little bit different in studio.

It's a very, very overwhelming setting, but I wanted to start with our tangent story a little bit.

Actually, let's start with what tangent is today because a lot of people are confused about what we actually are.

I think I've gotten feedback from people that we're an incubator, we are a trading fund, we're a market maker.

So I think just for the people out there who are not familiar, we're basically an evergreen fund.

So we describe ourselves as an evergreen fund in the sense that we invest across every life cycle of a crypto company.

But we actually haven't, we didn't start this way.

So why don't we dial the clocks back a little bit to 2019 and talk about how we met.

And then I think you messaged me on Twitter.

I was an investment banker with JP Morgan.

And I was just getting my hands wet or my feet wet looking dabbling into DeFi and then 1 of the only really education materials out there was your podcast Blockcrunch and so naturally I was like oh look this is pretty sharp Asian dude seems around my age and he's doing something really cool with this podcast.

1 or 2 episodes in, I really loved what you were doing, and so I just thought I'd reach out, And I'd never really done anything like that before.

And then to my surprise, you actually replied.

And I was like, wow, this space is pretty interesting because you can actually talk to people who run podcasts.

Did you reach out to me first or Arthur first?

So for reference, Arthur was your former boss and your last boss.

Did you reach out to your former boss first or did you reach out to me first?

I believe I reached out to my former boss first and then as we were talking about, either before I was about to join him or after I just joined him, then I started tuning into your podcast and then we started chatting.

And so you fast forward, is it 2 years later, we decided to start this thing together?

Because I remember it was also, I actually haven't met you in person at that time.

Yes, we actually met 1 and a half years in after knowing each other, I believe, and it was in Barcelona.

Because you reached out to me and you said, Hey, I'm thinking of starting something.

not surprised because I've never met you in person.

Why did you decide to reach out and kind of start this together?

Yeah so there's a couple of things I think 1 was I was ready for the next chapter in my career outside of working for a fund and at the same time I knew that I want I didn't want to do it alone.

And I wanted to find a partner that could really complement my skill set and my character.

By then we'd done some ridiculous investing together, both good and bad.

I thought you were a pretty good guy, honorable, trustworthy, very sharp as well, very hardworking.

And so I was like, you know, if I was going to do something like run a fund or, you know, start something by myself, who would I want to do it with?

And your name was on the top of the list.

So I was like, hey, why not just breach the topic?

And on the first call, you're like, I'm down.

And we're like, all right, let's do this.

Yes, I was already thinking of kind of striking it out and doing my own thing as well.

So I was, this is like 4 years into my last job, which is a long time at Crypto.

So I was like, okay, let's do something new.

And I was kind of looking for a partner to do this.

And I was actually shopping around a few different ideas.

And when you reached out, I think your idea appealed to me the most in terms of, hey, let's just start with the 2 of us and just pull our capital together.

So we actually taught around with the idea of like raising external capital, doing like a proper VC fund, but you've convinced me that it's not the right move.

And I think we made a really great decision just because of what we're going to talk about later, which is why we're an evergreen structure and what it means.

But let's talk about the old days for us because we started off with a mentorship model.

I think we basically reached out to all of the founder friends that we had and then we found 5

yeah 5 or 6 of them that we thought were some of the sharpest people in the space and you know most helpful angels and we just started co-investing together so tell us the story there you know How do we assemble this team of crypto avengers and what happened there?

Yeah, I mean, it really was a sort of go-to-market tool that we were using as 2 people that were trying to break into the scene and make it out on our own.

Obviously, there's a pretty big gap in you know relying on your previous firm's reputation and platform versus coming out on your own and I think a lot of people in this space also feel that at least people similar to us in prior positions, will notice a difference between when you're with a fund and when you're by yourself, it's a whole new different ball game.

And so we thought, hey, we've made a couple of great friends over the past few years working with founders, mostly founders of protocols.

And we know that they are pretty active or they want to continue doubling down and paying it forward by investing in the space.

So why not let's have a bit more of a formal relationship with them where they give us some of the time to impart knowledge that they've learned via the experiences they've had from founding these companies.

And in return we help you know deal source, filter quality control deals and allow them to co-invest with us with no fees, no carry, no nothing, just on a pure goodwill basis.

And that's really the original idea of how we wanted to start the tangent model.

And I think there was a lot of goodwill because we all did say together.

So that was, I think, more than 100x for all of our mentors involved.

And these guys are not just business relationships, but these guys are personal friends as well.

Like you went to Thailand with 1 of our mentors on that trip and then we went to a UFC fight with 1 of our mentors as well in Singapore.

So a lot of these are personal relationships that we truly just enjoy working with these people but at the end I think after 6 months or so, we had to kind of revamp that model a bit, mostly because of the capital constraints, right?

As our kind of fund size got a little bit bigger, we started to get sized out, and we just kind of turned it into more casual but close relationships.

So if we see investments that fit certain mentors, sometimes we reach out to them, but versus in the beginning where it's very structured, where it's like every mentor looks at every deal and we schedule the time between the mentors and the portculls.

So now we've become kind of more like a conventional fund structure, but with a twist in the sense that there's that evergreen concept.

So you're actually the 1 who coined that term as well, because we were trying to figure out, okay, how do we describe this 1 structure?

It's not really just a prop fund, because Prop Fund implies like trading, only trading, but it's not really just an angel fund because we're not just investing in private deals as well.

So basically it allows us to support protocols and companies in every step of the way, right?

Whether you are at the idea generation phase in the pre-seed structure or the normal conventional seed in series A rounds, all the way to the liquid markets where we can provide liquidity, provide capital in supporting these protocols on chain, or it could be as aggressive as outrightly buying tokens on the liquid markets as well.

We've done all of that in the past, but we'll continue to do this in the future.

We think it's the best way to give compelling and comprehensive support to all our different protocols.

Yeah, I think a big part of this is also because we notice what didn't work in other funds, right?

Because with venture, I think a lot of funds are getting so big that they can't possibly participate in seed rounds without completely messing up the cap tables.

But at the same time, especially recently with the high FTV kind of meta going on, a low float meta going on, people are really focusing on going back to the days of fair launch, which means a lot of great opportunities and great projects might not even have venture rounds.

So for crypto as an asset class with such a short liquidity window, it's not like equities where you build a startup and then 10 years later, maybe you get an IPO, maybe you get an exit.

It didn't make sense to us to just focus on like venture structured deals.

I think it made more sense to kind of look at it from first principles.

What are the best investment opportunities across the entire asset class?

And if it happens to be a venture, we do a venture check.

If it happens to be a venture, we do a venture check.

If it happens to be a liquid market, we do it.

So the best example for this is really Athena.

So Athena, we were the angel investors in Athena.

And then when they did a follow-on round in a venture setting, we also did that.

But then when they list the tokens, we also bought it at, I think, like 20x the size that we did in a C-check.

Like, I don't think there's any other asset class where like a Sequoia in Web2 VC would kind of, you know, buy your startup shares and then, you know, market make for your shares if they get listed and then buy your shares after they get listed.

So I think this is a much more unique structure.

And then 1 big part of it is also is 100% employee owned.

So We had a big debate about this in the beginning because I was thinking hey we should just raise some money You know do this a scale and not risk our own shirts But you actually convinced me to not do that and I think that was a great decision So what was going through your mind when you were thinking hey, let's let's make this an employee-owned fund

I guess relative to the average individual out there.

I would say that I'm willing to lose it all in order to...

Ideally not, but in order to enjoy the super normal profits that you can get in crypto.

We understand that there are huge risks involved, but we want to expose ourselves completely in order to enjoy the upside.

And so, I also think that if you're 100% employee-owned, it's also the purest form of investing because everything you have is on the line.

You basically live or you die by the sword, you eat what you kill, et cetera, versus having slightly misaligned incentives where some funds are playing an AUM marketing game, other funds are, I guess, making decisions because of the fact that it's not their money.

So even if things go wrong, it's not the end of the world and we've seen a number of these instances in the past where you know I look back at it and I say you know maybe we can do better And so I thought this was the best way to pit ourselves against the best competition that was in crypto and Here we are.

Yeah, and it's definitely better incentive alignment or at least it's simpler incentive alignment I think the argument some would make against employee-owned fund is probably it's not as scalable as bigger funds or like institutional funds at least on day 1 right if you go out

hundred million dollars unless you have a hundred million dollars lying around you can't do things at the scale as some of these institutional funds.

But at the same time, I think it does align incentives a lot more because your success is basically the founder's success.

If, if the, so the 1, 1 interesting game that I see, my VC friends play is they want to see markups.

We're going to see other funds come in and buy their bags, their investments at a later round and then they will market up on paper, but nothing is listed yet.

And they could use those kind of numbers to go raise money.

But for me, it never really made sense because it's not real gains.

I cannot pay for lunch with paper markups.

So I thought it was pure if like, if it's an actual, if we only get rewarded, if we actually get to exit an investment and monetize the investment.

So yeah, I think at the end, this was a much cleaner way of doing investing.

So thank you for convincing me and rep-pilling me on this evergreen employee fund model.

That's the kind of structure and story of Tangent so far.

So let's talk a little bit now about what we're investing in, kind of what we're actually excited about, because I think over the past 2 years, as we kind of approach for me, my second or third cycle, for you, your second cycle as well, I think we have a better idea of what are actually things that are worth backing in crypto.

So for us, I think the 3 main categories that we think of is 0 to 1 stuff, first of all.

That was the 1 category that we always talked about since day 1.

So what we mean by 0 to 1 stuff is just things that were not possible before that are enabled by crypto now.

So an example of that would be like Athena has an internet bond, they're creating an internet native yield that you can't possibly do this outside of crypto.

And then There's also things like Prime, which were investors in on the liquid markets.

See all The Blockcrunch Podcast with Jason Choi transcripts on Youtube

On a Tangent #1: How We 4x'd Our Fund in the First Year - Darryl Wang and Jason Choi