The Inquisitive VC - Max Webster , Investor at Version One VC
Max Webster graduated from Yale University with a Bachelors Degree in Political Science. Webster had always been fascinated by technology, particularly with solar energy, and believes that “climate change is one of the most important challenges our generation has to overcome.”
After graduating, Webster spent the first six to seven years out of college working on various energy-related startups. In January 2015, Webster joined the founding team of a company called Bright. A company which offers residential solar for the developing world. The company has gone on to raise over US$10M from investors including Susa Ventures, First Round Capital, Felicis Ventures and Max Levchin, a co-founder of PayPal.
Webster first came across Bitcoin in 2011, while he was a university student. “I thought the idea was really cool,” he told Brave New Coin, “but I thought there is no way that it would work and boy was I wrong.”
Through his work at Bright, while looking into the idea of decentralised energy markets and decentralised energy grids in 2016, Webster rediscovered Bitcoin and blockchain technology. He was researching if there is a way consumers can trade either tokenised renewable energy credits and/or kilowatt-hours without the use of a centralised utility in the middle.
After realising that Bitcoin was still going strong, Webster got deeply interested and dived into the underlying technology, consuming all content he could find to learn more. He states that in “a few months into it I quickly realised that in my opinion, this was going to be the biggest technological shakeup, biggest revolution, most interesting perhaps thing in our generation, and I decided I had to be a part of it.”
Webster subsequently left Bright and spent a couple of years consulting via his firm Entiende Bitcoin. He worked with GiveCrypto, which is Coinbase’s non-profit arm and Bitso, the largest crypto exchange in Mexico, doing user and market studies for crypto adoption in Mexico.
Through his research, Webster noted two things. One, people really wanted an alternative to their own currency. The vast majority of people believe that the Peso was going to devalue, but other than a bank account denominated in their own currency, the only savings alternative they had to was physical USD.
Webster explains that “there was huge appetite for digital dollars, so stablecoins, and also once they kind of start understanding Bitcoin, which took usually two or three sessions, to get the idea across. Most of them wanted to have a little bit of exposure to Bitcoin as well.”
The second thing he noted was the need for an easy, fast, cheap way for individuals to send either remittances or payments back to their family and friends in other countries. Bitcoin and stablecoins were both very interesting instruments for those individuals.
Webster was later introduced to two partners of Version One VC, Boris Wertz and Angela Tran, through his contacts at Coinbase. Version One, founded in 2012, is an early-stage fund investing in consumer internet, SaaS, and crypto entrepreneurs.
Webster mentioned that he joined the fund because “they were very focussed on crypto but not only crypto,” and because the fund is really small. Webster is only the third team member and the size of the fund os US$45M, allowing them to focus on early-stage entrepreneurs.
In regards to the funds crypto thesis, Webster mentioned that they are interested in, “money wrapped in code,” which he broadly terms financial services, and then voting, “voting as a ledger of value and ledger of intent.” The team is also interested in, but at a lesser extent, non-fungible tokens.
Webster also discusses his interest in DeFi and the potential for Bitcoin to be brought into the DeFi ecosystem. “I think a lot of people are going to be much more comfortable using Bitcoin as collateral for various assets, for various apps within Ethereum. You only need to look at the spot and futures market of Bitcoin versus everything else to understand that the liquidity is on a different playing field. I think it’s inevitable,” he states.
In regards to how this will occur, Webster has two thoughts. Firstly, a bridge could be built that locks up Bitcoin and trustlessly mints an Ethereum based representation of that Bitcoin as ERC-20 tokens, or entrepreneurs can try and rebuild some of the financial primitives on top of Bitcoin, such as a decentralized contracts for difference platform on top of Bitcoin.
The most recent investment Version One VC has made is in Lolli, a rewards application that allows users to earn bitcoin when shopping online. Version One participated in the US$3M seed round for Lolli, which was led by Founders Fund and saw participation from Chapter One Ventures, Craft Ventures, Bain Capital, Digital Currency Group, Ashton Kutcher and Michelle Phan.
Webster stated that Version One was also investors in Lolli’s pre-seed round, and this is their second investment in the company.“It's a great business to be the on-ramp,” Webster said. “Coinbase is awesome and all the exchanges are awesome, but the reality is that there are a lot of people who are not going to go and buy Bitcoin. A lot of ‘normal people’- I think it's much more realistic for them to acquire their first Bitcoin via a rewards program, via a gift, via some kind of earning and that's why we like Lolli.”
OhNoCrypto
via https://www.ohnocrypto.com
Nawaz Ahmed, Khareem Sudlow