New corporate studio, SuperLayer, aims to become a preeminent Web3 launch pad – TechCrunch

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There is a new corporate studio in the world that looks quite different from the previous corporate studios from a structural point of view. Unlike renowned groups like Atomic or Science or Expa who create companies that then sell capital to VCs who expect that capital to rise in value, this new studio, SuperLayer, plans to launch consumer projects and then, instead of selling equity to VCs, it will invite communities that use those products to invest in them by acquiring tokens, which can then be bought or sold or used to participate in other projects.

Indeed, in the case of SuperLayer, the tokens may all look a little different, but they will all be tied to a blockchain network called Rally that the founders of SuperLayer created earlier and want to help popularize by creating more interesting apps. above.

It’s part of what early crypto followers labeled Web3 and described as the Internet owned by builders and users and orchestrated with tokens. It’s also a world that many venture capitalists continue to shy away from. But they just might miss the boat as more outfits like SuperLayer begin to emerge, many of which were created by founders with experience in combat.

In Superlayer’s case, that founder is Kevin Chou, who sold his games company, Kabam, for $ 800 million in 2018 and almost immediately jumped into the world of blockchain technologies, which he says can open up new economic opportunities, including for players. and or creators.

In fact, before launching SuperLayer, Chou co-founded the blockchain games startup called Strong; he is also the co-founder of Rally, a launching pad for creators to create and distribute their own digital currencies which are essentially white label versions of the RLY coin, as it is called.

Chou has received backing from investors like Coinbase Ventures and Andreessen Horowitz, and they have already seen significant positive potential. These RLY coins, worth five cents when all 15 billion of them were minted, are now trading on Coinbase and several other exchanges for around $ 0.052. Investors and team members would currently control more than three-quarters of that supply – so they have to keep it or lower their price – but the idea is that the community owns 70% of it once all are distributed. in time.

If all goes according to plan, it could make many wealthy people richer and many less wealthy token holders richer as well. Consider: About 7% of coins are in circulation, giving the coin a market cap of $ 800 million. But if the 15 billion coins were released at today’s price, the fully diluted market cap of the coins would be $ 7.9 billion.

Chou et al’s efforts to decentralize its social token infrastructure are interesting in themselves. Yet the real story here may be the opportunities and challenges that an organization like SuperLayer begins to pose for venture capital firms due to its relative complexity compared to traditional equity investments.

This is largely why Sequoia Capital announced earlier this week that it is becoming a Registered Investment Advisor. Like Roelof Botha, the head of US operations at Sequoia, wrote Tuesday on Medium, becoming a RIA extends the flexibility of the business in several ways; it also allows Sequoia to further increase its investments in emerging asset classes, such as cryptocurrencies.

Chou doesn’t necessarily think Sequoia is restructuring due to its growing interest in crypto transactions. But he believes more companies will have to follow suit if they are to capitalize on efforts like his.

“In a world where these new kinds of tech platforms being created are powered by these tokens with a very different business model and a very different technology architecture,” smart companies recognize that “We have to do this,” Chou says. . .

By “that” he means to evolve. One of the biggest challenges with traditional funds, Chou notes, is that once an investment becomes liquid, a company’s obligation to its own investors is to either give them the money from that “exit.” , or to distribute their shares in the entity, at which point their investors can decide whether they want to keep or sell them.

But in the crypto world, the idea is often to use the tokens from one project and use them to participate in the growth of another project. It can mean buying and selling and being both an active – and sometimes very patient – participant. And it’s work that relatively few venture capitalists currently fully understand, suggests Chou.

They may come to regret it, as Chou says crypto founders are running out of patience with traditional VCs – and just as more and more blockchains and their apps start to be adopted by the mainstream. While a few years ago entrepreneurs weren’t afraid of having to hold hands with investors, he says, “increasingly in 2021, the founder of a cryptocurrency that’s gaining traction and trying fundraising will not go to the traditional Sand Hill Road business.

It’s not worth the time and effort, says Chou. Many have strict limitations around tokens, and most still need a lot of hands. He knows it, having lived it. “We must have spent a lot of time with finance [teams] this [have] never made a crypto investment. We had to organize investment committee meetings, CFO meetings, lawyer meetings – just to hand them their tokens. Then [you have] to help them set up their security and operations around how the general partnership holds the tokens and how it distributes them to their LPs… ”

The process, he says, was “really painful”.


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