Providing investment opportunities in Bitcoin startups – Mike Jarmuz of BTC-specialized VC “Lightning Ventures” talks

10 months ago 103

14th Beyond The Price

The 14th “GM Radio: Beyond The Price”, which was released on December 22nd, featured a venture capital (VC) company “Lightning Ventures” that invests in companies specializing in the crypto asset (virtual currency) Bitcoin (BTC). Mike Jarmuz, managing partner, is participating.

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This distribution is a reconstruction of GM Radio, which was distributed in February last year on the Twitter (currently X) space, as Beyond The Price.

Lightning Ventures’ mission is to accelerate the growth of innovative Bitcoin-related companies. The company’s members say they believe Bitcoin will become a global financial asset in the future.

Specifically, the company invests in companies that build Bitcoin infrastructure and payment services, as well as companies that utilize the Lightning Network.

connection: What is the “Lightning Network” that even beginners can understand? | Explaining the characteristics and mechanism

Podcast content

The title of this distribution is “Traditional VC model investment VS token sale investment”. You can listen to the podcast (in English) below, but here we will introduce the main points of the content.

Jarmuz explained that he previously invested in various startup companies, but founded Lightning Ventures a year and a half ago. He said he founded the company because he saw a strong need to attract venture capital to Bitcoin.

Lightning Ventures has invested in approximately 30 Bitcoin-related companies by the time of GM Radio’s broadcast. In addition to wallet companies and exchanges, it has invested in companies related to the Lightning Network, companies that provide shopping, e-commerce, Bitcoin (SAT) return services, etc., and says that the ecosystem has grown significantly.

The company’s purpose is to “provide everyone with the opportunity to invest in Bitcoin startups.” Jarmuz also said that he specializes in “enabling people to invest in companies.”

Lightning Ventures invests in startups that are not affected by short-term Bitcoin price movements.

What you want from your investee

When asked about what he looks for in a company he invests in, Jarmuz said, “It should be profitable.” In addition, “If there is only one founder, the company must have technical expertise,” “The founder must be ideally unique,” and “The company must be founded by co-founders with whom they have collaborated in the past.” “There is already a product that is popular or growing.”

He also explained that he would also check to see who else is investing. He also said that since there is not much information available at the time of investment, it is very important to confirm what kind of team members are in the team at an early stage.

Jarmuz says that a characteristic of venture investing is that even if there are many failures, successful investments can make up for it all.

investment model

In the cryptocurrency space, there are cases of investing by participating in token sales, but Jarmuz said that this style does not suit him.

He says it is suitable for investors who want to sell their tokens quickly, but not for investors who want to work with the founder over a long period of time. He also said that the traditional illiquid approach of venture capital suits him.

Regarding trends in virtual currency venture capital, he said that Bitcoin is attracting increasing attention. Rather than looking for the “next Bitcoin,” venture capital firms say they are focusing on finding promising projects on the Bitcoin blockchain.

The Bitcoin price on February 27, 2023, when this broadcast was recorded, was still hovering around the $23,000 range.

Jarmuz believes that high-profile external projects will eventually be deployed on Bitcoin.