The Venture Capital Side of Cryptocurrency and Blockchain

On February 18th, 2020, TF Blockchain interviewed Kate Mitselmahker, Founder and CEO of Bloccelerate VC, at our TF Portland Chapter. We discussed the venture capital outlook on blockchain and crypto and Kate shared her journey to discovering blockchain during her time at Gartner, to her path to create a venture fund when others thought it was too risky. Kate shares her investment thesis, thoughts on enterprise vs retail blockchain applications, and what she thinks is in store for the overall landscape in near future.

Development and growth in emerging technology does not occur exponentially, in most cases. With cryptocurrency, blockchain, and the crypto space in general, as top buzz words in emerging financial technology, we can derive an understanding for the 2018 crypto crash in the fact that, the growth could not have been one hundred percent progressive; not with the sporadic rise and fall the crypto space had experienced since its invention. The influx of activity in crypto space, following the 2017 spike in bitcoin had an overwhelming impact on trading and mining. This increase in activity ultimately led to the crash of the crypto space, but also facilitated the increase in enterprise and industrial action relating to cryptocurrencies and institutional blockchain investment; all as a form of institutional adoption.

A branch of this institutional adoption is Venture Capital (VC), which is generically a form of private equity used in providing resources, expertise, technical and financial support to start-up and emerging companies which have very high growth potential and revenue positivity. To elucidate on the adoption of Venture Capital for the crypto space and blockchain, TF Blockchain founder and host of the TF Blockchain podcast series, Jonathan Blanco, sat down with Kate Mistelmakher, the Founder and CEO of Bloccelerate, a leading Venture Capital Firm in the blockchain and crypto space.

Jonathan Blanco & Kate Mitselmakher

In the meeting, which was held at the TF Portland chapter, Kate Mistelmakher debunked several atypical beliefs about blockchain and the cyberspace, with her wealth of knowledge having worked for the better part of a decade with the largest technological research organization, Gartner. Kate explained her initial contact and continued interest in the crypto space while working at Gartner, but the organization’s body were not sold on the idea of investing in abstract financial tech –despite the numbers it was doing at the time. Nevertheless, this is understandable when one considers the risk analysis of blockchain investment and coinmining / trading, even at an industrial level.

As an industrious person, with the right information and experience, which had gotten Kate the right network of professionals, business owners and other contacts she needed, she decided to start a Venture Capital Firm, which has grown to become one of the top in the field, as well as notable for consultation and professional expertise in crypto enterprising. Kate went into more details on the massive demand on blockchain from Fortune 500 companies, the term being the number one searched keyword on Gartner, as at 2017.

The conversation kicked off with a distinct clarification between Bitcoin and blockchain, a confusion which Kate alluded was more common than one would imagine. Subsequently, she explored the emergence of venture capital for cryptocurrency and blockchain institutionalization, industrialization and most importantly, enterprise. Over the course of the conversation, Jonathan and Kate got to the mutual agreement that despite the negative impact of the crash, it spurred more interest into the crypto space for investors to explore, at different scales.

This interest is also peculiar in the area of Venture Capital, which Kate admitted was difficult to set off, but has become more regulated. The whole idea is to provide the required financial and technical assistance to blockchain enterprises, as well as companies which were blockchain dependent. Motive for this direction was to validate the value of cryptocurrency as digital assets, like gold, giving those highlighted risks and profit margins to attract investors and promote growth.

Kate Mistelmakher also outlined the other requirements for Bloccelerate, which are relatively similar to other Venture Capital firms. According to the CEO, these requirements for the pipeline criteria are the revenue positivity in terms of execution and product sales, and its existence as an enterprise, including the blockchain usage as mentioned earlier. With the provision of venture capital, in addition to other industrial investment outlets, enterprise in the crypto space has been on a steady rise over the last few years. This has become quite notable within the crypto sphere; Michael Anderson, Co-Founder of Framework Ventures has continuously invested in crypto enterprises and in 2020, explicitly expressed interest in Decentralized Finance (DeFi).

Furthermore, the Venture Capital relationship with crypto space has become influential in politics. Presidential contending candidate, Pete Buttigieg, was a favorite in the tech and innovation world, granting him the support of all of Silicon Valley and its affiliates, as well as over 50 top tier Venture Capital Firms. However, following his step down from the race, there is a hold back on the direct impact venture capital and the crypto space would enact on the political institution, compared to the current diversification which has been enacted in the financial institutions globally.

Kate Mistelmakher closed the session with her opinion on the resources, audit and programmability of crypto investment options, and a question for the attendees;

If there is one thing you could go back in time to do…what would it be?

VC in Crypto and Blockchain Event at TF Portland

Listen to the full podcast here.

Kate is the Founder and CEO of Bloccelerate VC, a team of serial investors, entrepreneurs, and executives from Fortune 500 companies passionate about supporting entrepreneurs in the blockchain space. Kate grew up in a volatile economy that could wipe out fortunes from one day to the next. Kate's personal mission is to find and cultivate the ideas and companies that will deliver trillions of dollars worth of business value. She aims to positively impact lives of billions of people around the world.

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TF Blockchain is the premier blockchain conference in the Pacific Northwest. We host an intimate conference setting focused on advanced level topics and dedicated networking sessions with investors, entrepreneurs, executives, and policy makers.

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