Matt Huang
speaker
205 appearances
1 recordings
1 series
first heard Apr 2025
last heard Apr 2025
Matt Huang’s voice in public audio — every appearance, attributed to the second.
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Appearances
and privacy and individual sovereignty point of view. And it was just the first thing that I really felt was a calling to try to make this happen. So from there, it was intellectually easy that this was the right call, but on relationships and personally, it was hard.
I mean, our founding insight that both Fred and I had around Paradigm, we had a shared belief that crypto would be one of the most important technical and economic trends. We believed that to invest in crypto required being what we call crypto native. And we sought to build that. We didn't actually have a top-down plan.
What that meant to us was making sure that we had the right group of folks who could navigate that uncertain future. Back to the legible, illegible point. I think crypto, even today, but definitely back then, is a frontier that's extremely illegible. It's hard to understand what is valuable, what will be valuable, to separate noise from signal. It's a deeply technical space.
And we knew that hiring investors from central casting was not going to be it. We were lucky with some of our first hires that skewed us in a much more technical direction. And I think today, I would say two primary things that drive us at Paradigm. The first is we think of our mission as advancing the frontier of crypto. We care about investment returns, too.
But we're not primarily optimizing for that. I think if we advance the frontier of crypto, make crypto work, grow the pie, get a little bit lucky, I think we'll also generate great investment returns. But it's really that first thing of this is an important set of technologies that really needs to exist. We think a lot of value will also be created.
The second thing is that we try to build a team that embodies being builders, not just investors. Part of this is just aesthetic orientation of, I think both Fred and I liked building things and a lot of the early team do as well. And we're just oriented towards trying to figure out on the technical or product side where the frontier should be going.
But part of it's also, we think it's one of the best ways to also invest in the space. Perhaps the analogy is somewhat like biotech where It's so technical that you really need subject matter domain experts to understand what's happening. That's not enough on its own because you have to mix that with the commercial sense too.
But a lot has emerged from thinking of ourselves not just as an investment firm, but as a place that builds products and does research.
When you put it like that, it sounds reckless. I mean, part of the founding idea was to create a vehicle. We didn't even think of ourselves as venture capitalists. We wanted to create a vehicle that was very flexible and could participate in the value that we saw being created in crypto and to contribute to that. And it wasn't always clear what form that would take.
In the early days of Bitcoin, for example, there's always this question of should you invest in the Bitcoin startup or should you just buy Bitcoin directly? And I think a lot of people got caught in that. The right answer was just do both. But I think it was very important to us to be able to participate across the stack of early stage investments, currencies themselves, tokenized protocols.
And we viewed the early fund as a barbell strategy between what we viewed as extremely high conviction crypto monetary assets and early stage startups on the other end.
The first fund was an evergreen fund that could hold publics, privates, and everything in between. We raised $400 million, and that itself was an interesting process. Crypto was somewhat hot the prior year, and so it was on everyone's radar. This is 2018? This is 2018, yeah, early 2018.
It was still deeply controversial, and almost everywhere we talked to had plenty of crypto skeptics at the table. But we raised $400 million, launched late 2018, and our plan was to start averaging into our highest conviction positions, which were at the time Bitcoin and Ethereum.
Yeah, basically between $6,000 and $3,000. And Ethereum was $100. And then in the year after launch, we raised another about $300, $400. So about $700 to $800 raised total. Then we also have a venture fund that we raised in 2021 that was $2.5 billion, and we're in the midst of investing that now.
And we raised commitments for our second venture fund about $850 million earlier this year, or I guess 2024. But not investing out of that yet. Not investing out. How about some stats on the team? There were 65 people, mostly SF, some in New York, some in D.C. The policy team is in D.C.
And what we call the investing and research team, which is the core group of folks making investment decisions and trying to figure out the future of crypto, that's about 10 or 11%.
Well, we were 20 people on that team in 2021. Yeah, in hindsight, I think it was too large. There are many different ways to build a successful investment team. And I think one of the most fascinating things is learning about how Lots of other people do it. I think there are teams that are very large, but I think it definitely changes the dynamic of how a group of people gets to a decision.
I think at 10 or less, it is possible still to have a full contact mutual discussion and search for truth. The larger the room gets, the more people are self-conscious and afraid of saying something stupid or challenging someone more senior than them or whatever. So it works for us. It's an eclectic group of people. So not every person.
In fact, I don't think there's a single person on the team who would be central casting for someone to be hired at another investment firm. For better or for worse, everyone on the team has a unique entry into thinking about the future of crypto. We have engineers, researchers, security experts.
Very rarely would you see an Excel model. Much more commonly, a couple people might be at the whiteboard hashing out some math. You have Georgios with his three screens, 200 tabs typing code. A lot of the work that we do is really in the weeds of the protocols and mechanisms that we think will be important for crypto. And one of the reasons we spend time there is we think
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