Not every venture investor was bewitched by the promise of cryptocurrencies and the growth of companies like FTX, the crypto exchange that filed for bankruptcy nearly two weeks ago. Some venture capital firms actually ignored the fanfare and passed.
Consider Ramy Adeeb, founder and general partner of 1984 Ventures, who in 2017 took a very public stance against investing in crypto. He published a column on LinkedIn that argued against the sector, likening Bitcoin to a scene in the movie “The Big Short” when Mark Baum and his staff realize that a local Miami mortgage broker has been conning strippers into taking out highly leveraged mortgages. Adeeb attempted to debunk several myths about Bitcoin including: that there’s a limited supply of the currency; that blockchain makes Bitcoin valuable; and that Bitcoins are secure. (Adeeb is the founder and ex-CEO of sharing website Snip.it that was sold to Yahoo in 2013 and is also a former principal of Khosla Ventures.)
Adeeb’s firm, a seed stage venture investor focused on software-enabled startups in sectors like fintech, infrastructure and healthcare, never seriously considered investing in FTX or companies like it. At the time, they were investing their first fund, a $45 million pool. “Our biggest concern with crypto was the plethora of applications enabling pyramid schemes or Greater Fool Theory,” he said, referring to games like Axie Infinity, which allowed users to trade in-game winnings for real…
