Blockchain & Crypto-Assets — 2018 Investor Survey Results

2
Quick overview of respondents
Angel
Seed
VC (mostly A)
VC (mostly B/C)
VC (late stage)
PE
Corporate 7%
2%
5%
9%
39%
36%
2% Personal Money
$1-20M
$20-100M
$100-300M
$300-999M
$1B+
Evergreen 5%
9%
25%
26%
21%
12%
1% Bay Area
So Cal
New York
Boston
Other US
Europe
Asia
Rest of World 1%
1%
2%
7%
1%
19%
24%
46%
0-3 yrs
3-6 yrs
6-10 yrs
10-15 yrs
15+ yrs 33%
23%
23%
17%
4%
Investor Type Fund Size Location Years as an Investor

3
The vast majority of investors view blockchain as a major innovation, while a
few admit to not knowing the category well enough to predict
Which of the following best describes your personal views about
blockchain?
n = 191
21.9%
59.16%
8.38%
0%
10.47%
Blockchains are enabling the next generation infrastructure of the
Internet and will fundamentally disrupt how many industries
operate. This is the biggest technology disruption since mobile
Blockchains are an interesting area of innovation and will help
create some great new market opportunities for investors but
may not be as big as today’s hype
It’s just a new form of database. This market is completely
overhyped. It will work in some instances but not many
I fundamentally don’t believe in blockchain technologies. They
are slow, complex to manage, energy-intensive and inefficient
I don’t understand enough about blockchain to have an informed
opinion on this question

4
Half the investors we surveyed have not yet invested in any blockchain-
related startups - and those who have are proceeding carefully.
How many blockchain companies have you backed in your fund?
0 1-4 4-10 More than 10
1%
6%
42%
50%
n = 177

5
Even investors active in the blockchain space are ensuring their recent deal
volume isn’t overly concentrated on the blockchain.
Among investors with at least 1 blockchain investment, what %
of your deals in the past year have been blockchain-related?
0% Up to 20% 20-50% More than 50%
2%2%
68%
28%
n = 89

6
Most investors don’t have a dedicated blockchain-focused partner at their fund.
Do you have a partner who is dedicating all of his or her investment activities to blockchain / cryptocurrencies?
Yes No
83%
17%
n = 177

7
All respondents see some potential in the blockchain, with 90% moderately or
highly optimistic of its long-term impact.
24%
66%
10%
0%I fundamentally don’t believe in
blockchain technologies
This market is completely overhyped. It
will work in some instances but not many
Interesting area of innovation that will
create some great market opportunities,
but may not be as big as today’s hype
This is the biggest tech disruption since
mobile and will enable the next generation
infrastructure of the internet
Which of the following best reflects your personal views on the blockchain?

8
Even among funds with existing blockchain plays, most investors have
focused on equity investments rather than token offerings.
Has your firm invested capital in a cryptocurrency / token (vs. solely equity in the company)?
7%
14%
24%
55%
n = 87, reflecting only investors whose funds have made at least blockchain investment
No We have done one
investment to learn
We have experimented
with a few
We have done several and
imagine this will be a continued
source of investment

9
40% of investors in the equity of a blockchain company have seen the
company issue tokens following their initial equity investment.
Has your firm invested in a company that issued tokens after you’d already invested in the startup?
Yes No
60%
40%
n = 87, reflecting only investors whose funds have made at least blockchain investment

10
Most funds are approaching token offerings with caution, but 50% of
respondents expressed at least some enthusiasm about their potential.
What statement best describes your firm’s position on
cryptocurrency / token offerings as a fund-raising mechanism?
n = 175
6%
44%
35%
15%
We’re against it - we only want to
own company equity
We are taking a wait-and-see
approach but are skeptical
We are taking a wait-and-see approach but
are enthusiastic; need to do more homework
before deploying too much capital
We are embracing tokens as an important
investment mechanism

11
Investors’ personal views on the value of token offerings to VCs maps to their
funds’ perspectives; 44% are optimistic while 56% have reservations.
What statement best describes your personal view on
cryptocurrencies / tokens?
n = 174
2%
42%
38%
18%
I’m pretty skeptical that it is a healthy investment
for a VC and doubt I would invest in any
It’s interesting but the potential volatility is
too high and makes me doubt I would invest
It’s interesting - I believe that more value will
accrue to protocols vs. software companies
and am also attracted to earlier liquidity
The old model of VC will die - this will
become the single best way for a VC to
deploy money

12
Investors are deeply skeptical of ICOs as a fundraising mechanism, with nearly
1/5th of investors believing they are effectively a scam.
Which statement best describes your view on ICOs?
n = 150, 20 respondents opted out
1%
23%
58%
18%
ICOs are a scam; in the long-run, market skepticism and
regulatory oversight will cause the ICO market to collapse
I’m pretty skeptical - they may be effective in
niche situations but aren’t the best way for most
founders to raise capital
The liquidity of ICOs is a good trend because it will let
investors shorten timeframes to return capital; they
won’t replace VC but are a good supplement
ICOs will revolutionize capital formation; between
higher liquidity, crowd-sourced nature, and ease of
raise, ICOs will be a permanent fixture

13
Funds with at least one blockchain investment are more likely to have changed
their standard protective provisions to prohibit/restrict token-based financing.
Have you amended your protective provisions to limit token-based financing transactions?
Yes No
96%
4%
n = 85
Yes No
80%
20%
Funds with no
blockchain investments
Funds with 1+
blockchain investments
n = 87

14
Funds with at least one blockchain investment are also more likely to have
sought formal LP approval to enable direct token investment.
Have you amended your LPA or sought approval to allow investments in tokens?
Yes No
90%
10%
n = 85
Yes No
65%
35%
Funds with no
blockchain investments
Funds with 1+
blockchain investments
n = 87

15
Investors are optimistic about the future of Bitcoin with 62% believing it will
be a significant store of value or currency in the long-run.
What statement best describes your personal view on Bitcoin?
n = 146, excludes 23 respondents who opted out
7%
55%
27%
12%
BTC won’t play a major role in the future due to
combination of gov. crackdowns, tech limitations, or
lack of general public interest
BTC has interesting reasons to exist, but is likely
to be a niche asset / commodity in the long run
BTC will be a significant global ‘store of value’ that
may someday rival gold, but is not likely to be a
significant 'transfer of value,’ payment currency
BTC will fundamentally disrupt the financial
services industry and may someday rival
national fiat currencies

16
Investors are less bullish on Bitcoin’s current price with 57% expecting a
significant correction or reduction to $0.
How do you feel about Bitcoin’s price today?
n = 144, excludes 26 respondents who opted out
16%
27%
52%
5%BTC is a Ponzi scheme and will go to zero
BTC has some value but is grossly overvalued
today and will see a massive price correction
BTC’s price seems rational given the huge increase in
awareness of the asset and number of new people
opening wallets
BTC has a long way to go as it climbs to higher
prices. HODL!

17
26% of investors see massive long-term potential in Ethereum, but the
majority are skeptical.
Which statement best describes your views on Ether / Ethereum?
n = 125, excludes 44 respondents who opted out
26%
61%
13%
ETH is overrated and is driving today’s unsustainable mania
of ICOs and token offerings; when losses eventually mount
from token collapses, ETH may crash too
ETH has proven useful in token offerings and in
creating the concept of smart contracts, but I’m not
convinced it will be a dominant global standard
ETH will be a long-term sustainable currency that will
play a role in enabling the development of internet
infrastructure and payments

18
Most investors see a long-term role for both BTC and ETH, but 1/3 of
respondents believe ETH will significantly surpass BTC in the long-run.
What is your belief about Bitcoin vs. Ethereum?
n = 117, excludes 52 respondents who opted out
33%
12%
55%
Both BTC and ETH have an interesting and important role to
play in the future of global currencies and commerce
BTC will be a superior, more valuable asset than ETH
because it has greater market recognition and a simpler
use case as an alternative to gold
ETH will emerge as a much stronger platform than BTC due
to better governance, ability to adapt algorithms, broader
use-cases, and more developers flocking to the platform
Both will win
BTC will win
ETH will win