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TCT Exclusive: Jane Lippencott, Investor @ Winklevoss Capital

We are thrilled to announce this week’s exclusive with Jane Lippencott, Associate at Winklevoss Capital! After discovering Bitcoin in 2014, Jane quickly latched onto the future of money and decentralized technologies and dove head first into the cryptocurrency industry after interning at China Silver hedge fund, Merrill Lynch private wealth management, SOSV’s Chinaccelerator, and Nest VC. At Winklevoss Capital, she now focuses on decentralized technologies and how they can reshape the internet, financial services, and money. With deep experience as an investor, speaker, advisor and operator, we sat down to discuss all things cap table related, including:

Jane Lippencott

TCT: Thanks for sitting down with us, Jane. Let’s jump in.

How did you start out with regards to your career?

I grew up between the United States and Asia, spending most of my time in Hong Kong. The adults I was exposed to as an expat had a really wide variety of careers — artists and directors, professional athletes and dancers, armed forces and government workers, and executives at non-profits, schools, and banks. They inspired me to pursue a career I was passionate about, and to seek out interesting niches of culture and technology.

When I was in college in Hong Kong, I held a few random jobs — as a barista, teaching cooking classes, tutoring — and was an intern at some fintech startups, an event organizer, a hotel conglomerate, etc. My main goal was to get reps in the HK tech scene and to build my base of functional experience. I can’t stress enough how important it is to prioritize experience over pay as a young person. Hong Kong has a huge, active ecosystem of startups with tons of government support via InvestHK so it was a great place for me to find my footing. Eventually I landed an internship at a hedge fund where I cut my teeth in trading and investing. Over the next few years I mostly interned at venture firms like SOSV and Nest.VC before dropping out of school to do crypto full time.

You were an early crypto adopter, having been involved in Bitcoin since 2014. What caught your attention back then, and how has your perception of crypto changed since?

I first caught wind of Bitcoin while I was in high school. When the Umbrella Revolution happened in Hong Kong, people were looking into privacy-oriented, censorship-resistant chat apps and payment rails. At the time, I thought Bitcoin was interesting both as stateless, decentralized money and as a platform for immutable apps. Bitcoin is definitely the gateway drug for the rest of crypto. I was passionate about crypto but I was really young and didn’t have a clear picture of how to work in the space or meet other investors IRL. 

Eventually, I integrated crypto into my internships by doing a lot of public speaking, leading internal education sessions and experiments (such as creating an ERC20 for an entrepreneurs club in Hong Kong, Metta), and supporting my firms’ crypto-focused portfolio companies, like BitMEX and others. In 2016 I joined a team of people looking to fork ZCash, iterating on the idea of decentralized, private, and digital cash. We launched ZenCash at Consensus in 2017.

I don’t think I’ve fully recovered from the craziness of the ICO boom that ensued, and I don’t think we’ll ever see that level of hype again. I believe instead that Bitcoin will be solidified as an uncorrelated asset, and crypto will slowly creep into the techstack of founders building quality consumer products, unbeknownst to most users, by way of programmable platforms like Ethereum and use cases like decentralized finance and creator economies. 

You currently serve as an Associate at Winklevoss Capital, family office of Tyler and Cameron Winklevoss, where you invest in blockchain companies and funds alongside Sterling Witzke. Tell us about your experience so far. What has been the most challenging aspect of the job? What has been the most rewarding moment to date?

I met Sterling on the train to the 2019 Crypto Finance Conference in St Moritz, where we were both speaking. Sterling is a really remarkable person and investor, and I knew pretty much immediately that I wanted to work with her in some capacity. I joined Winklevoss Capital a few months later to focus on our crypto portfolio. I’m responsible for sourcing and diligence for new crypto investments, as well as supporting our existing portfolio companies and funds. I fell in love with crypto before I fell in love with venture and investing, yet today I can’t imagine being involved in one without the other.

Working directly with Tyler and Cameron has been really phenomenal. They’re truly prolific operators who excel at building successful, paradigm-shifting businesses on the cutting edge of tech. 

In terms of challenges, we’re really lucky to work closely with many great crypto funds, but accordingly sometimes it is difficult to stay on top of deal flow; I usually look at more than a thousand crypto deals per year, so it can be an uphill battle figuring out which to do diligence on, which to share with our fund partners, etc. 

How does working in a family office compare to that of a traditional venture capital firm? What are the pros and cons?

Family offices are certainly idiosyncratic. Venture firms with typical GP/LP structures approach investors with a structured offering, including an investment thesis and portfolio management strategy, and are responsible for more or less sticking to that strategy over the term of the fund. As the sole investors in a family office, the founders have more flexibility to iterate and improve things like the firm’s thesis, investment process, diligence rigor, and investment cadence on an ongoing basis. As a result, there really isn’t a standard approach to investing in the family office world. No two family offices are alike, and often a single family office will look slightly different from one year to the next. This flexibility can be a great thing or a massive inconvenience for the investment team, depending on how much say they have in the firm’s approach. 

By design, Winklevoss Capital feels a lot like a traditional venture firm. We’re really excited about backing exceptional founders at an early stage, so Tyler and Cameron have taken a really structured, consistent, venture-focused approach from day one. I appreciate this disciplined lens since I am tasked with investing in a risky asset class at a risky stage. 

Since you also invest in funds, what do you look for in fund managers?

I think that in venture the only two things that matter at the end of the day are the results you generate for your LPs and the relationships you develop with your founders. Whenever I’m evaluating a new fund investment, this is where I start. Everything else — thought leadership, press, social media engagement, whatever — is great for deal flow and for free resource propagation to new founders, but it’s not really core to your role. The best investors typically get glowing reviews from founders with concrete examples of many times the investor pulled through for them.

We’re seeing crypto make a comeback, with Bitcoin rising to over $18,700 per coin (at the time of writing), an impressive 160% YTD performance. What’s different about this bull run compared to 2017?

I think most importantly, institutions are starting to come around. With the overhang of COVID uncertainty and governments around the world letting their money printers run, institutional investors like Paul Tudor Jones are looking to Bitcoin as a hedge. Major banks like Citibank are releasing positive research on Bitcoin, even though they don’t yet offer it to their clients. Grayscale’s Bitcoin trust, which allows investors to buy Bitcoin exposure via their IRA and brokerage accounts, has over $10bn in AUM, demonstrating a clear market opportunity for a Bitcoin ETF, which would push the market up further.

Tools for investors, traders, and miners, are now a lot more sophisticated, including credit products that allow market makers to improve their capital efficiency, and derivatives that allow miners to hedge their bitcoin exposure. These instruments, and their resulting liquidity, are reassuring to institutional allocators who have long been uncomfortable with undeveloped capital markets infrastructure.

Retail investors, though, certainly aren’t back in force. In 2017, retail sentiment led the ICO craze. Search frequency for keywords like “Bitcoin” and “cryptocurrencies” today is at 1/10 of the 2017 boom. Industry insiders joke that we’re not receiving the “How do I buy Bitcoin?” texts from our friends that typically mark the beginning of a bull market. It remains to be seen if Bitcoin’s price climbing higher, PayPal enabling buys/sells and transfers of Bitcoin, the integration of Libra into Facebook products, and general increased interest in trading by millennials and GenZ’s catalyze a shift in retail sentiment. 

In 2017, we didn’t have the institutional interest, adoption, and narrative in our favor like we do today. I think this bull market will look fundamentally new.

 If you’re interested in chatting more about Bitcoin or crypto use cases, my DMs are open! 

You’re a mentor at various organizations like Near Protocol’s Open Web Collective, Celo’s CeloCamp, and the Filecoin Frontier Accelerator. How has mentoring played a role in your success to date, and what drove you to mentor others?

I love working with founders so mentoring pre-seed and seed stage startups via various accelerator and incubator programs has been really rewarding. While my portfolio companies are my main priority, I want all founders building in crypto to feel like VCs in the space are accessible and supportive. Also, many of the programs are protocol-specific, and it’s really helpful as an investor to learn about the nuances, strengths, and shortcomings of new blockchains first hand from builders. 

What are you passionate about outside of work?

Normally I’d be traveling as often as possible, but I’m surprisingly enjoying San Francisco these days. I spend a lot of time outdoors, mainly hiking and biking. I also love to cook, especially Meditteranean and Asian food. I read a new book each week, usually gravitating toward fiction and science fiction. I also write a lot, but don’t share my content as much as I probably should! One thing I really miss… music festivals. We’ve been robbed of a whole year of live music! 

Speaking of, what’s your secret for getting on the cap table? 

Even before I became a VC, I enjoyed working through problems and contributing to design and strategy with friends of mine who were founders. Being an entrepreneur is an incredibly tough job and I really respect anyone audacious enough to build something totally new from scratch. I especially love founders working in the crypto space, because I think crypto at its core is a really empowering technology. Crypto founders tend to be shooting for the moon — totally redesigning the space they’re building in from first principles, often with a lofty, values-oriented endgame in mind. Through 4 years of working in crypto, I’ve built strong friendships with some of the most significant leaders in the space, and they’ve taught me a lot about what it takes to be a successful founder. 

I typically focus on building authentic relationships, providing crypto-specific insight and anecdotes from other investments/founders, asking the right questions, always being available, and proving to my founders that I’ve got their backs. Ultimately, though, I think founders generally sense if they’re talking to an investor who truly respects them and loves their vision, and that’s what cap table construction really comes down to. 

What’s your biggest cap table “mistake”? 

As an early stage investor you’ll always have regrets since it’s impossible to see the future. Some VCs are inclined to invest too often and regret it, some to pass too often and regret it. There are one or two companies I wish I’d invested in over the past year, so I think I’m the latter. As a steward of someone else’s capital, I think it’s important to be brutally honest with yourself about mistakes and proactive in adjusting your approach. I don’t have any regrets in my personal portfolio because I angel invest very infrequently with high conviction, and the other 90% of my capital is in crypto (risky, I know!). 

The year is 2030. What’s the state of crypto?

By 2030, Bitcoin will have shed its crypto-native, cypherpunk roots and be considered an asset that regulated institutions and their clients use to hedge against fears of inflation and general macro turmoil, real or perceived. Institutional infrastructure will be sophisticated to the extent that it mirrors that of traditional capital markets, and major governments will be on the path to including Bitcoin products in their treasury and currency management strategies. DeFi will continue to eat centralized finance like exchanges and OTC desks and provide infrastructure only possible with crypto underpinnings, such as global payment rails and liquidity routing networks. I believe the success of mass market DeFi products will prove the usefulness of blockchain, making way for retail applications spanning social/content networks, gaming, commerce, and social money — categories I’m really excited about and actively investing in! 

Follow Jane on Twitter (@janehk) for more insights into crypto and venture capital!

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Seed

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Series D

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Series F

Sources: Crunchbase, Twitter, LinkedIn

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