How I Invest with David Weisburd
E152: The Peter Thiel Mistake This Crypto VC Won't Make
Fri, 04 Apr 2025
In this episode of How I Invest, Evan Fisher, Founder of Portal Ventures, shares his expertise in fundraising, venture capital, and deal flow. He discusses the key elements of successful fundraising, how to craft a compelling pitch, and what investors look for when evaluating opportunities. Evan’s insights provide valuable lessons for both founders seeking capital and investors looking for high-quality deals.
Chapter 1: Why did Evan Fisher start Portal Ventures?
And so a result of this is we're always in the lookout for like, what are things that just don't really make sense from a crowd psychology perspective? You were a star associate at Insight, a $90 billion fund. You were crushing it when we first met. You decided to leave that and start Portal Ventures. Why did you decide to start Portal Ventures? I started Portal Ventures in early 2022.
It's something I'd been thinking about for a long time, though. I started getting into crypto during the DeFi boom. And as time went on, it dawned on me that this was not just a new, no, it wasn't just Bitcoin. It wasn't just a new product. It was an entirely new asset class. And as I saw that, I started pitching more crypto deals at Insight. I got my start at Insight.
After spending a couple of years at Goldman and I was helping invest across software, internet, FinTech, and I started pitching crypto deals. The crypto deals that most excited me though, were typically a early stage and B token deals. And the reason for that was I saw these protocol business models effectively. I started Portal because I saw the emergence of a new asset class.
It's a new asset class because it's a business that de-risks in different manners than software does. Leo construction is different. The way you think about sourcing is different. The return profile is different. The liquidity is different. The list goes on and on. If you look throughout history, new asset classes emerge, new asset managers emerge.
There's a reason Blackstone is not the world's best venture capital fund. And so I have limited reason to believe that the world's best venture funds will be the world's best crypto funds. So I left to start. I raised about 40 million for fund one in early 22. It supported the managing directors at Insight to run at the mission of being the preeminent first check in crypto investor in the market.
I saw a lot of managers in crypto grew over time. And that meant where they made the majority of their money, they were no longer playing. And that's ultimately where we wanted to play.
You want to be the first check into a new crypto protocol. Tell me about the advantages and disadvantages of being the first check.
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Chapter 2: What are the advantages of being the first check in crypto investments?
Yeah. You know, it's my favorite area to play. I'll start with that. It's my favorite because of some reasons it's related to, you get to see a business and a founder transition from really an idea to a skilled protocol that's making money and trading in the billions of dollars of valuations if you're lucky and successful. The biggest advantage is... It's the game selection that you're playing.
Investing in general is all about game selection. You have to choose the games that make sense. And when you're investing at the first stage with ownership that makes sense relative to fund size, what you have to do is you have to believe that you can pick something that's going to be in the right order of magnitude of outcomes.
When we think about investing, we're playing a game of backing founders with conviction before anyone else is around the table, like making a deal before it's a deal, being the first money in. Then if it's a billion plus outcome, it typically returns the fund. So that's what we're hunting for. That's something that we feel comfortable betting on at the end of the day.
especially in an asset class like crypto, which is so volatile and so tricky to actually have precision on. So the overarching benefit is it's a game that we not only like playing, but we think is the optimal risk reward and the most profitable for the industry today.
The biggest risk is obviously that it's incredibly volatile, is an industry that moves, I would say, every 12 to 18 months with a complete turnover, which is to say the pace at which you become irrelevant is about 12 to 18 months in crypto if you are not constantly reinventing yourself. And what that means is if our job is to stay at the head of the pack,
ahead of the trends, we're constantly reinventing ourselves. Every year, you have to figure out what's exciting, what's new, and what does the game look like to actually build interesting crypto business. That manifests in a lot of ways. One obvious example is just where we source, for instance. The big funds can source from early stage funds like us. And we hope that doesn't change.
We hope that we can be a great source of deal flow for the world's best mid-stage crypto funds into perpetuity. But when we look for talent, the reality is sometimes in the past, we would find talent at universities. Maybe it was with Katrina, my business partner's work at Penn Blockchain, and that still is a good source of talent, but it could be universities.
Increasingly, you're seeing crypto actually attract a lot of traditional founders, since you're seeing spin-outs from Stripe found a lot of great crypto businesses. But if you go even further back, sometimes you found the best crypto founders just at a meetup in Berlin, for instance. Our business, in terms of how are we sourcing,
How are we finding the talent that we're backing is one example of things that are just constantly changing that we have to constantly reinvent.
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Chapter 3: How does Portal Ventures create investment theses?
The way that we actually execute on that though, typically a very thesis driven approach. Every quarter, Katrina and I sit down and we say, what are the theses that we're most excited about? A thesis could be related to an end market. So it could be related to Bitcoin, for instance, as an end market. A thesis could be related to a technology.
No, it could be related to a new encryption standard or a new technology that allows you to create a deep end for instance. Or it could be related to a business model. We've done deep dives into different distribution mechanisms effectively. Through that process, we then try to get world-class on the thesis that we're running out. So we reduce the scope of the investable universe.
And in doing that, we go really, really deep in specific theses. The process of doing that then helps us figure out, okay, where is the best talent for this? The Bitcoin founders that we backed don't actually come from the same talent pool as as for instance, the real world asset founders we backed.
We're the first check into a protocol called ARCH, which is smart contract programmability on Bitcoin L1. ARCH has raised two rounds after us. It's becoming really the dominant player for programmability on Bitcoin L1. There we found the founders through Bitcoin angels and KOLs. It was referred to us from them.
The founder's background is he previously ran a shoe company, a sneaker company, and got really deep into the category. That looks very different than Plume, for instance, which is an RWA L1. It's a real-world asset L1. Much more of a regulatory focus, very different go-to-market. For Plume, Chris, the founder, sold a company to Coupa in the past.
And he looks a lot more like a traditional Silicon Valley founder that ultimately got really deep in crypto, became quite crypto native and could build something special. So that's the process from there. If we go deeper, though, into then what do we do to fill a portfolio with that? What we do is we say we want businesses that can be really fundamentally valuable.
We find those businesses based off of theses. We then want the output to be profitable. typically a portfolio of no fewer than 30 assets with no less than 5% ownership. It's all comes down to the, like, what do you have to believe math? Our job at the end of the day is to produce outsized returns for our LPs.
We construct a portfolio where if we have a couple of assets that are multi-billion dollar outcomes, we're happy with our fund math. Um, And that's ultimately the game that we want to play with what crypto is today.
Let me tell you about a conference I'm very excited about, Alpha on the Delta, which is coming up in late April during Jazz Fest in New Orleans. Unlike some of the larger conferences, Alpha on the Delta is limited to 150 allocators and 30 niche managers on an invite-only basis. It's an authentic and different kind of event with some really great people.
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Chapter 4: What is the Bitcoin economy thesis and how did it develop?
And those are effectively the same. to us. So that's kind of how we think about operationalizing it. We're constantly doing retros to see are there new things that we should add to this framework such that we can keep getting better and better at finding what's next.
We're three quarters ahead on this Bitcoin economy thesis. How did the idea come to you? How did you decide to advance it and walk me through your process? Thank you for listening. To join our community and to make sure you do not miss any future episodes, please click the follow button above to subscribe.
One of my favorite things about investing is it's really like psychological warfare in some ways. Truly, it's like everyone says, you know, you have to run into the building when it's on fire. And that's really easy to say. It's like whoever has the willpower and is measured enough to think through those times, that's the person that runs in and does it.
And so a result of this is we're always on the lookout for like, what are things that just don't really make sense from a crowd psychology perspective? And that helps tip us off sometimes on things that could be interesting to explore.
And so at the time that we were looking into the Bitcoin ecosystem, the Bitcoin economy, just before that, people said, Bitcoin will never be anything more than digital gold. No one wants to use their Bitcoin for anything. Everyone just wants to hold Bitcoin and not do anything with it. And I'm like, that's weird. Like, I don't think everyone falls into that camp.
Sounds a little black and white thinking. And I started asking some people because I was like, I'd actually like to get yield on my Bitcoin. I started asking friends and I started asking whales, like, what would you actually like to do with this very large asset? So you talk to the customer and you realize, okay,
Like not everyone wants to do things with their Bitcoin, but like it's certainly not no one. Then you look at this and you say, okay, it's an asset that's trillion dollars at the time. And it seems consensus within the crypto world that this is going to be parity with gold at a minimum. So this is going to be a $10 trillion asset.
You say, okay, if 10% of the holders of this asset wants to do something with it, that's a $1 trillion asset base off of which you could earn fees for loans, off of which you could earn transaction fees for sending it. You could do a lot of different things with this. And so then we said, okay, you know, I think that it's worth evaluating. Like there's a customer that has a need.
How do we dig in and say, what's that need? And so that's what we did. One of the biggest things that we found was a lot of Bitcoin holders want to be able to Maybe take out a loan against it, but they don't want to bridge it away from Bitcoin. They don't want to bring it to an exchange all the time.
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Chapter 5: How does Portal Ventures support early-stage crypto projects?
And that's something I take from Insight, actually, as we draw a parallel there. Insight is world class at creating proprietary opportunities. They're doing it in growth stage software.
so proprietary looks very different from pre-c in crypto but we still take this framework of like when you can create proprietary opportunities that's a source of alpha and that's our job there's this idea that if you invest at a very early stage and you're investing with four other funds somehow it's more de-risked where it's not really de-risked it's the same level of risk you just maybe have a false sense of security i strongly agree with that and sometimes it's actually even more risky because it's kind of like the tragedy of the comments like
We, we really like going on the roller coaster with our founders. We never feel it to the same extent, of course, because we have a diversified portfolio. They're working on one thing, but we find it to actually be helpful because it's just like, it means that we're, we're invested. We've skin in the game. And so if there are four other investors around the table, no one's feeling it like you are.
We don't want to see something that we let go. fail. But at the end of the day, if there are a lot of people who are on the table, it's not, there's not the same ownership.
Conversely, if it's a huge success, it returns your entire fund. It's a big deal. What percentage of your theses die and how quickly do they typically die?
You know, there, there may be only been one or two theses that have quote died.
Talk to me through the process and the funnel of your thesis. Give me percentages.
I don't have the exact percentages. I'd have to go back and cut numbers on that front. We just have a notion that tracks all of this. I can speak though to a couple of theses that didn't make it through. The first would be a thesis that Katrina was working on a couple of years ago in MEV, which is, think of it as pay for order flow effectively on blockchains. MEV is a huge profit pool in crypto.
And we looked at that and we said, okay, we should consider having exposure
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Chapter 6: What is the process and success rate of Portal Ventures' investment theses?
What we would change on this front to double down on it though, is there were times in fund one where we backed something And we had conviction, but it wasn't happening and it wasn't moving as fast as we thought it was. And we kind of questioned that conviction.
What we actually should do in those times is double down and say, okay, if we're right, we should probably put more chips into this company. And so there are, you know, call it three or four companies in Fund One that this...
applies to where i looked at the market and i looked at them for instance struggling to raise the next round and i said this is weird like i'm pretty certain that we're right on this nothing's changed on the thesis but the market's not getting it we had a really interesting opportunity where we could have doubled down at not a material step up on on valuation and really increased our ownership no these companies will still return the fund i think with where they're trading but you'd really inflect the math and so then that raises the question of um
How do we get around that? Which is where we wanted to carve out more capital in fund two. So when we jumped from 40 to 80, part of that was so that we could double down on our winners. And we've actually doubled down on two companies already in fund two. We led follow-on rounds into them. We're very excited about both of them. And we feel good to have that capability.
The second lesson that we learned was learning to pay up occasionally. When I started the fund, it was a time when deals were flying left and right at $100 million for the first round. And so naturally, we were very adverse to paying up. We said, this just doesn't make sense. The reality is there were a handful of deals that we could have done where maybe the first round was at 50 or at 60.
And it just, it never traded below that. And there's some of those companies which are already liquid and would have returned the fund. A lot of our, rather the vast majority of our anti-portfolio, with maybe a few exceptions, are because we didn't pay up. So that raises the question of when should we do that and what's reasonable.
How's crypto investing like biotech investing?
The way that we think about these founders and these protocols, for instance, like we're thinking on probabilities sometimes. It's like a blue chip crypto native founder typically has a higher probability of of success. And that's one of the components that looks similar to bio. So if you think about biotech investing, think about how do you actually value these companies?
The way you do it is you say, okay, based off of these stages, like based off of stage one, stage two, et cetera, et cetera, what is the probability of success? or the probability of getting to the next stage. And then what's the cash flow available based off that? Then you apply discount rate.
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