Friends & Family Newsletter Jul 2023

Jul 12, 2023


10 min

Dear Friends and Family,

We are still buzzing with excitement from the Portfolio Day in Neustadt.

On June 30, over a hundred founders, advisors, investors, and venture capital colleagues from BFG and BFC gathered at our rather stunning headquarters.

Without a doubt, on that day, Neustadt an der Weinstrasse boasted the highest concentration of Blockchain enthusiasts in Europe.

Berlin, Paris, Zug – take note, competition is coming, and we have the advantage of a superior view (ok, Zug, we don't have the lake, but we are working on that one)!

This marked our third year of having our community together in person, and we have never had so many participants - and better weather!

Even close to midnight, people were still outside, enjoying the view of the Hambacher Schloss, a historic symbol of the German democracy movement.

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For those who couldn't make it this year, we will be announcing the date for 2024 in a few weeks, allowing you ample time to plan.

Crypto Investor Days in Hamburg

"Do you want to trade crypto or become an early investor in a household name?"

was the question we asked at the Hamburg Crypto Investor Days in the famous venue of Donner & Reuschel at the Hamburg Binnenalster on June 21.

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This event aimed to provide potential investors with insights into the current blockchain landscape, enabling them to make informed investment decisions.

Of course, we are slightly biased here as Blockchain Founders Capital focuses on great builders who want their products to become household names.

Christoph Fröhlich, Editor-in-Chief at "Das Investment" has the story here.

When we talk to investors, we often find ourselves explaining the differences between blockchain, Web3, and crypto, addressing concerns about the optimal timing, the potential for excessive hype, and whether investing in AI may be a wiser choice (spoiler alert: we firmly believe that AI and blockchain is a potent mix).

However, the same questions were asked when computers were invented (with skeptics asserting that the world wouldn't require more than a few), when the internet was dismissed as a passing fad during the dotcom crash in 2000, and when Steve Ballmer derided the unveiling of the iPhone in 2007.

Even Artificial Intelligence has perpetually been deemed 'just around the corner' for the past three decades.

The founders we meet in the field every day understand the necessity of buildiing with numerous unknowns and persisting amidst years of uncertainty until their “overnight success” (typically taking a minimum of five years of hard work) materializes.

As Steve Jobs famously stated in one of the most iconic advertising videos of all time: “you can disagree with them, glorify or vilify them, but the only thing you can't do is ignore them because they change things... they push the human race forward”.

Portfolio Update

Speaking of people who are crazy enough to think that they can change the world:

We made a new investment in a remarkable team and are mighty proud of these guys!

Let me explain:

Web3 technology has unlocked the potential for tokenizing items of smaller value.

You can buy company shares and trade them on the stock exchange, but the costs and complexities of transferring ownership rights are too big a burden for smaller value items.

Consider, for instance, the desire to invest in the creative output of a music artist.

Currently, there is no straightforward method to do so.

Historically, the financing of artists has primarily been the business of major labels or, in earlier times, relied upon the patronage of wealthy aristocrats supporting the likes of Mozart and Beethoven.

This dynamic has often resulted in significant challenges in sustaining artists. After all, without adequate financing, art cannot flourish.

Recognizing this issue, Michael Höweler and Alexander Franck, during their tenure as managers at Amazon Music, acknowledged the transformative potential of blockchain technologies.

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Inspired by these new possibilities, they conceived a platform enabling fans to invest directly in artists, providing support while also reaping the rewards of their successes.

Together, they founded Biddz, a venture we envision becoming synonymous with music ownership in the future.

We thank our fellow investors, Martin Junker from Ventures Stars and Robert Kusche from IBB Ventures, who led this deal.

Additionally, Stefan Winners, a renowned angel investor and former CEO of Burda Digital, recognized the immense potential of both the idea and the team early on and helped us calibrate the opportunity.

After reading this newsletter, we encourage you to explore Biddz yourself.

ETH Munich

Mark your calendar for Munich's most prominent Ethereum hackathon on August 11-13.

We are delighted that our colleague, Sagar Barvaliya, has played a pivotal role in bringing this event to life in collaboration with our friends at PretzelDAO and TUM Venture Labs.

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Following the motto "Daheim we believe in Building," this hackathon aligns perfectly with our investment strategy of "Investing beyond the hype".

The event will not be another showcase for hyped NFT collections, wallet projects, or token-trading applications.

Instead, the ETHMunich Hackathon will set out to uncover solutions that address real-world challenges, capturing the interest and enthusiasm of individuals beyond the core blockchain space—the "non-veterans".

If you don't mind the smell of sweat, cold pizza, and hard work, we invite you to join and connect with the brightest minds in one location.

Alternatively, reach out to Sagar for further details on how to get involved.

Why our blockchain investment focus is different

Our investment thesis centers around blockchain technologies, yet we are the first to say that “no one cares about Web3 or blockchain”.

The only thing that matters is how it can improve a current business 10x or create a new business model.

Like Biddz, Talentir, Gameboard, and the other companies we have invested in.

It’s not about onboarding people to Web3. It’s about the seamless integration of blockchain technologies where the users already are.

You don't have to believe in Bitcoin or bored apes to invest in companies that use blockchain/Web3 technologies. Blockchain is about so much more.

It is a pillar technology that will drive efficiency improvements and paradigm changes in many industries.

The people who can best evaluate such an impact are the ones who have been working in a particular industry for a long time and possess a profound understanding of its underlying principles.

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The potential of blockchain is often distorted by short-term greed and misinformation, which earned the technology somewhat of a perception problem.

But this was also the case when the number of railway companies peaked in the United States 107 years ago and when the Neuer Markt (the now-defunct German stock exchange for young companies) saw crazy valuations for companies without an actual business model in the 2000s.

Technology is the defining theme of our time, and it will only become more crucial. And Blockchain is an integral part of this tech puzzle.

If you want to know more about our distinctive approach as venture capital investors, get in touch with us!

Other News

  • We became partner in the EY Startup Academy spearheaded by EY’s EMEIA FinTech Leader Christopher Schmitz.
  • This year, the EY Academy is breaking new ground by introducing three distinct focus areas: Embedded Finance Solutions, Web3 & Digital Assets, and Sustainable Finance/ESG FinTechs.
  • Dr. Burkhard Bonsels has graciously accepted the role of a BFC venture partner, deepening his involvement as a trusted advisor and sparring partner.
    Burkhard is a well-known figure in the private equity industry, having co-led Quadriga Capital for two decades and made significant contributions during his earlier tenure at Boston Consulting Group. Furthermore, he has gained recognition as a prolific investor and trusted advisor to Mid-Cap Corporates, PE-Funds, and Family Offices.
    He was also an early investor and believer in Blockchain Founders Capital, which meant a great deal to us.
  • Sagar and I will attend the Token2049 conference in Singapore during Sep 11 - 15 to meet family offices and other investors.
    If you are in town that week or if there are people that you would recommend us to meet, please ping us.
  • Did you know our website has a photo gallery with photos from our encounters with founders, friends, and venture capital family?
  • Did you know that, despite having an all-male fund operator team (shame on us), three out of eight of our startups have a female CEO or a female co-founder? Go figure!

Thanks for reading!

Wolfgang with Ben and Sagar

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