Sequoia Capital partner Matt Huang, another heavyweight from the finance Industry, is the recent one to make his exit from venture capital firms and entering into Cryptocurrency Investing. Wall Street Journal sources, states that he would be starting a new cryptocurrency investment fund alongside Fred Ehrsam, Coinbase co-founder.
This exit is follows multiple such exits where people are turning towards a more lucrative cryptocurrency investment as compared to traditional investment. Some of the notable exits were,Nick Tomaino of Runa Capital, who started 1Confirmation, a cryptocurrency-focused fund which has received investment from billionaire Mark Cuban. Joel Monegro, an analyst with Union Square Ventures also quit to start his own fund called Placeholder.
What’s more interesting is to see these movements in the times when the VC firms are deciding upon whether they want to invest in crypto market or keep ignoring it. Since, a considerable number of partners in the VC firms firmly believe that this is the opportune time to involve crypto into their investment strategy, so it would seem that these movements are a demonstration of their belief in the future of crypto investments.
At the same time, a number of VC firms have decided to keep hold of partners who are interested in crypto by creating special crypto funds that allow them to explore their passion without leaving the firm. An example of this is the Andreessen Horowitz crypto fund which is led by general partners Chris Dixon and Alex Rampell.
The Next Chapter
Sequoia Capital, following Mr. Huang’s departure, will continue to maintain its interests in the crypto space, including investments in Polychain Capital, Metastable, Filecoin and Orchid Labs. Sources also indicated that the firm is inclined to invest a substantial funds in the new firm.
Sequoia, as CCN reported, is currently embroiled in a high-profile legal dispute with cryptocurrency exchange giant Binance, which the former accuses of violating an exclusivity agreement by engaging in discussions with other VC firms.
Meanwhile,Fred Ehrsam stepped down from his role at Coinbase in 2017, but maintains a seat on the board of the startup. After guiding Coinbase to become one of the largest cryptocurrency exchanges by volume in the US, he is expected to bring a high level of technical capacity to the fund’s investment strategy.
This partnership for a new fund reciprocates with Coinbase’s launch of a new Index fund to facilitate the crypto traders.