Entrepreneurs do not necessarily have to take the route of issuing tokens and cashing out. It is also a good choice to dig deeper into some clearer business logic and choose entrepreneurial directions with stability and cash flow. The content of this article originates from the Twitter space hosted by Folius Ventures founder Jason Kam and was organized by RootData, organized by wublockchain. (Preliminary briefing: How to build a successful crypto VC? What should you pay attention to when investing in projects) (Background supplement: Ethereum VC is too obsessed with infrastructure, is it dragging down the entire crypto industry?) This article was hosted by Jason Kam, founder of Folius Ventures, participating in RootData Twitter space, Wu Shuo is authorized to reprint. Jason said that he has hardly made any investments in recent months and is not that optimistic about the cycle. In the past, if a 10% share was invested below US$50 million in the earliest stage, and then the project team conquered the exchange, it would even have no products. As long as the popularity rises, you can get excellent book profits by listing the game on Binance. After everyone understands this routine, they will find that there are many standard game-building projects; the industry’s oversupply of projects without hematopoiesis capabilities, coupled with the lack of buying orders in the secondary market, has led to the current situation; DISCORD, Telegram, Even if games on Twitter have a great chance, there is a high probability that a platform similar to 4399 mini-games will grow on TG. Introduction to Jason and Folius Ventures Ruby: Good evening everyone, and welcome to the first space event in the Crypto Financing Lesson One series hosted by RootData. I am the host Ruby, and tonight’s topic is “Thriving Through Bulls and Bears: The Wisdom Behind Tier 1 VC Investments.” We are honored to host Jason Kam, founder of Folius Ventures. Jason graduated from Carnegie Mellon University and worked on Wall Street. He entered the Crypto field in 2018 and established a Twitter account @MapleLeafCap. It now has more than 45,000 followers. Jason will share with us his investment experience and investment amid market fluctuations. Insights into future trends in the crypto market. Could you please briefly introduce yourself and Folius Ventures? Jason: Hi everyone, my name is Jason. Folius Ventures was founded in September 2021. It was interesting at the time. After my 2020 DeFi Summer, two friends, Ben and Santiego, suggested that I create a fund because the market desperately needs more attention to the Asia-Pacific region, especially entrepreneurs with unique backgrounds. In almost three years since its establishment, we have managed funds ranging from US$220 to US$230 million, with a team of five people, mainly in Asia, including Shanghai, Shenzhen, Hong Kong and Tokyo. We are different from other institutions in three ways. First, although we have made fewer investments in the primary market this year, we have invested more in the primary market in the past two years. We are a primary and secondary mixed investment fund. The amount of a single investment in the primary market is generally between US$500,000 and US$4 million. We can lead or follow the investment. We have larger positions in the secondary market and can buy mainstream assets like BTC and ETH, as well as invest in small-cap projects like Pump.Fun. We have a very open investment strategy. The second difference is that we have always preferred entrepreneurs from the Asia-Pacific region. Between 80% and 90% of our investments are in the Asia-Pacific region. Thirdly, most of our investment cases focus on the application layer, such as centralized exchanges, SaaS software, mobile application games and other consumer-oriented products. It is a great honor to be invited to participate in this event. Ruby: We have noticed that Folius Ventures is still active in the current market environment, especially investing in some well-known projects in the seed round. Can you please share your reasons for continuing to invest in such a market environment? Jason: Actually, our investment pace has slowed down a lot this year. In addition to We.Rich, MegaETH, Catizen and WSPN are our recent cases, but in fact many projects have completed financing last year, but the information has only been released recently. We have been investing less and less since March this year, with almost no investment in recent months. This is similar to other peers. We are cautious mainly because we are not optimistic about the market cycle. The model that most VCs used to profit from rapid IPOs and exits over the past few years is changing, requiring a recalibration of strategies. Secondly, we prefer investment in the application layer, but good opportunities are hard to come by, and the emergence of entrepreneurs also has certain volatility. The combination of these three factors has slowed down our shots this year. Of course, the timing of financing disclosures is not determined by us, so it may give people the illusion that we make frequent moves, but this is not the case. How should the current VC investment model be reconstructed? Ruby: You mentioned that Tier 1 VCs currently generally adopt a wide-net approach and plan to list on CEX within 6 to 12 months. You think this investment exit method needs to be restructured. So, what would your ideal VC exit model look like? Jason: First of all, I want to take a step back and talk about it, because in the past, this industry had a "cool secret." In the early stages, if the project valuation is less than 50 million US dollars, you invest in it and account for 10% of the share. As long as the project team can overcome the listing problem of the exchange, it does not even require an actual product, as long as there is enough market popularity and someone is willing. For buy orders, this exit cycle can be calculated on a monthly basis. In other words, if you invest now, the project will be listed on the exchange three months later. The liquidity brought by the exchange and the intervention of early traders will enable early investors to obtain extremely high book returns. If these early private equity investors not only invest in the name of the company, but can also obtain shares through advisory agreements, pledges or airdrops through project partners, and can even unlock them during TGE (Token Generation Event), then the entire exit cycle will be very short. Even if there is a standard cliff period (usually 12 months), in many cases the project will make back the investor's capital in the first month, and the rest will be profits. This strategy became popular around 2019 and 2020, and today everyone has clearly seen this pattern. There are even many projects that have to operate in this mode even if they are not intended to exit quickly. We estimate that in the next 6 to 12 months, there may be 50 to 200 projects valued at more than $500 million, all of which are aiming to be listed on exchanges. However, the problem is that after these projects are listed, their proportion of circulating supply may only be 2% to 10%. Without exception, these projects will face the unlocking of a large amount of circulating disk within 1 to 2 years after listing, increasing from 2% to 10% to 20% to 50%. In other words, the circulation plate may increase by 5 to 10 times. If more projects are listed in the next six months, the market...