Shaun Maguire (a crypto partner at Sequoia Capital), one of the most active venture capital firms when it comes investing in cryptocurrency, has issued an opinion regarding the future of many VCs that are interested in crypto. To him, many of the companies that are now experimenting with crypto investments will “pull back” due to market conditions and a misunderstanding of crypto as an investment.
Sequoia Partner Is Not Excited About Crypto-VCs
Shaun Maguire (a cryptocurrency partner in Sequoia Capital), one of the leading VC firms within the crypto sector isn’t optimistic about the future prospects of any other venture capital companies. Maguire, who specializes in companies in the tech and crypto sectors that are either in seed or early investing stages, stated in a recent podcast that other firms that are now entering the crypto space are going to “pull back” on these investments when the markets get less frothy.
He stated however that Sequoia would not be included in this group due to how these investments were made within the company. According to Maguire, the company has “permanent intentions” when it comes to its investments in the sector. Maguire explained:
Sequoia’s approach to everything is deliberate. Although we often spend hours debating each strategy, all aspects of the investment, even excruciating details, this helps us make great decisions.
The firm, which has already invested in several companies in the sector like Polygon, launched a $500- $600 million fund in February to invest in “liquid” crypto assets as a complement to its other investments to “participate more actively in protocols” and “better support token-only projects.”
Misunderstanding Crypto
Others could be responsible for this abandonment. According to Maguire, there is a fundamental misunderstanding of what crypto and Web3 might offer as new technologies, with some investors touting decentralization as a ”silver bullet.” Maguire declared:
It isn’t a panacea that will solve all your problems. But it is better than nothing. It is obvious that you would like the majority of computing to be centralized.
Venture capital funds have seen a huge increase in the number of blockchain-based businesses. This is due to the increased interest generated by metaverse, Web3, NFTs and Web3. In Q1, VC firms invested $30 billion in crypto and fintech startups.
What do you think about Sean Maguire’s take on the future of some VC investments in crypto? Comment below.
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