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