Name: Balancing The Ledger: Cryptocurrency Could Make Women Rich, End Venture Capital — And How Bitcoin Will Rise Again
Uploaded: 2018-04-27
Duration: 10 min 20 s
Description: Meltem Demirors joins The Ledger team to talk Bitcoin, women in cryptocurrency, and how her new firm Athena Capital will bring balance to the force.

 Welcome to Balancing the Ledger, where finance and tech intersect. I'm Robert Hackett. I'm Jen Wieczner. And today, we're joined by Meltem Demirors, the founder of Athena Capital. Thank you so much for coming on the show. Thanks so much for having me. All right, so let's kick things off by talking about venture capital. You've been known to go around the venture capital circuit and the conference circuit wearing a sweatshirt that says venture capital is dead. Yes. Is it dead? Has cryptocurrency killed venture capital? Look, I don't know the answer to that question definitively. I think cryptocurrency's tokenization, ICOs, have introduced a new dynamic into early stage capital formation, and venture firms are definitely taking notice. I also think there is a rising tide of companies who are looking at the venture ecosystem, who are looking at the power dynamic between investors and entrepreneurs, and who are asking themselves, is this really the right way for me to capitalize my company? Or are there other ways to do it that reduce some of the potential conflicts of interest? And so the shirt really is intended to be a bit incendiary, if you will, I've been known to be a little bit of a troll from time to time, but I think it gets people thinking, it gets people asking questions. And so it helps to spice things up. I'm sure we just saw this week there's reports that Andreessen Horowitz, the renowned venture capital firm, is launching a crypto focused fund, which would be a big deal. Andreessen's actually been investing in crypto assets since 2013. They were investing early on in companies, like Coinbase, many, many others, and so they've built a considerable equity portfolio in the crypto asset and blockchain space. What they haven't been able to do because of their current LPA, or their LP agreement, the way they raise capital from their investors is invest directly into cryptocurrencies using investor funds that are dedicated to the main fund. So I think part of the motivation is creating a new fund with a new LPA that gives them more flexibility to invest in cryptocurrencies. Some of the established venture capital firms are running into some obstacles, like we've seen Sequoia is now engaged in a lawsuit with Binance, the biggest crypto exchange out there. They said they were going to invest at a certain price in this company, but then all of a sudden, all of the crypto coins started going bonkers. And now that company wants to get a better deal somewhere else. Yeah. So it seems like there is some kind of mismatch between the traditional thinking in venture capital and what's going on with all of these cryptocurrency focused companies. Well, I think the primary driver there is the power dynamic between entrepreneurs and investors. I think, over the last decade in America, the venture community has engaged in something that I like to call the thought leadership Olympics. It's really fascinating. You see these VCs sitting on stages, talking about all of these different themes and trends, but really, it's the entrepreneurs who are doing a lot of the hard work. A venture capitalist is an locator of capital. If you're allocating someone's capital and focused on maximizing the return on that capital, you're going to behave in some ways that may not necessarily be in the best interest of the companies you invest in. And I think the Sequoia lawsuit is one that, to be very frank, just makes me laugh. It's like they're stomping on the table going, hey we wanted to invest. Let us invest. So I don't know what they thought the outcome would be. But if I was a company raising money, I might think twice before taking a check from Sequoia or signing any sort of legal document. And speaking of Athena Capital, your new company, you're doing something different than what the other VCs in the market are doing. Tell us a little about that. Sure. So my primary focus has always been really working with entrepreneurs who are trying to help improve usability and accessibility of cryptocurrencies. I think one of the things that I think about a lot is 60% of wealth in America is controlled by women. And in the US in particular, women drive 80% of household spending. Now, if you look at the cryptocurrency ecosystem, we don't really do a great job communicating the value proposition or the use of these assets. And I feel like we're missing out on this major opportunity to market to 51% of the population, to 60% of the wealth, and to 80% of consumer spending. So my question was, can we invest in companies? And can I help them figure out different ways to approach growth that isn't so heavily engineering and tech focused? I feel like the narrative-- you talk about Bitcoin or Blockchain-- inevitably goes into this tech rant, but can we talk about UX? Can we talk about product? And can we talk about education and advocacy to really help people understand and use these tokens for something beyond just financial speculation? You recently featured in a glamor magazine feature about women in Cryptocurrency and Blockchain. It was a fantastic article and great spread. Tell me a little bit about your experience being a woman in Blockchain. Sure. So my response to that is tell me about your experience being a man in journalism. That's totally fair and warranted. Look, I don't think gender has anything to do with the experience you have. I do think one of the things that really drew me to the cryptocurrency ecosystem early on in 2012, 2013, when I started getting involved in Bitcoin, was the fact that it was a true intellectual meritocracy. Now, I do think one of the things that I've liked to do over the last few years is use my platform to just feature some of the women in this industry a bit more. I think media tends to look just at the founder or CEO of a company, who in the crypto ecosystem, for the last few years, has trended predominately male. But I think there are a lot of really fantastic female operators, female entrepreneurs, female engineers who are building these companies alongside their male counterparts. And so I write this blog called the Leaders Series where I like to feature the stories of these women. And then I think, with the glamor article, one of the things I really wanted to talk about is just the balance of power in our world. I think, for better or for worse, today, power and wealth are still very closely aligned. And crypto assets have created a lot of new wealth. I, myself, have been fortunate to participate in that, along with pretty much anyone who invested 2017. And I think the question is, can we use our influence? Can we work together as an industry to start to break down some of these power structures to make our world a bit more egalitarian, but also, to ensure, again, that 50% of the world's population isn't missing out on this massive wealth creation event? The statistics-- showing very few women investing in Bitcoin. Do we really know-- this is a pseudonymous currency. We don't know who's behind this. Do you think the statistics of women investing in bitcoin et cetera are actually higher than they're made out to be? Absolutely. So I think people always like to look at this Google Analytics survey someone published. So someone looked at Google Analytics and said, 95% of searches on the word, Bitcoin, are done by men, and 5% are done by women. And I think that statistic, number one, is completely inaccurate. I also think that, generally, the men in the industry tend to be a bit more outspoken about their investing behavior. I know a lot of women who participated in cryptocurrencies early on, who built a considerable amount of wealth, who have been active, they just don't vocalize it as much and they don't speak about it. And so I do think there is more balance. It's probably more 80-20. That probably mirrors general tech more closely. Still, I think we can do a lot better. I don't know if we can get to 50-50 in the next year, or two years, or five years, because I think there are deep rooted systemic problems that lead to some of the gender imbalance we see, especially at leadership levels. And I think that will take time and a lot more than just our ecosystem working on it to figure out. But I do think that there are opportunities to change the ratio a bit. So can we go from 80-20 to something more like 60-40? I would be pretty happy with that. I think that would set a good tone. And I do think there is an opportunity here to stand out from the rest of the venture ecosystem, from the rest of the tech ecosystem, and say, hey cryptocurrency is a place where all people are welcome, regardless of your affiliation, your background, your experience level. We actually do have a lot of people who have no formal education who are leaders in the crypto ecosystem, which is another, I think, pervasive, systemic bias that you don't see in other types of tech investing. And so I think there's just an amazing opportunity here to enable all sorts of people to participate in this, not just wealth creation, but this new technology, this new movement that we're creating together. Speaking of men being outspoken about this, we just had-- I was at a hedge fund conference a few days ago where an investor, John Pfeffer, is saying that Bitcoin, the price of Bitcoin, which was it 20,000 back in December-- it's now about 9,000, so more than halfway down. Now he's saying it could hit 700,000. A VC, Tim Draper, put at $250,000 price target, and he's saying that could happen by 2022. What's your view on this? Are we still in a bear market? What are these bullish predictions? Where do you think we're going? Look, I think it's more about if you actually believe in Bitcoin, there are going to be ups, there's going to be downs. I don't know what price that's going to be in 2020. All I know is that we've moved from if it will happen to when it will happen. And in my view, there are going to be certain systemic events in our world that are going to accelerate the adoption of Bitcoin. But there are also things that we can do as an ecosystem to increase the adoption of Bitcoin by making it more usable, more accessible, but also communicating about it in a way that's understandable to most people. I think most people still feel like when someone talks about bitcoin, are they speaking English? Is that a foreign language? And so I think we are shifting from just early adopters and tech savvy people investing to now a broader audience investing. So I do think that there is this increased level of in-trust. And now the question is just, how do we make it safer for consumers? How do we make it more accessible? And how do you resolve some of those frictions that make it so hard for your average person to just conceptually grasp why Bitcoin matters? And I think once you get to that point, the price will go to a point that is greater than where it's at today. So you're still bullish. I'm very bullish. I'm a mega bull. Well, thank you. Fantastic. Thank you so much for coming on, Meltem. Yeah. That's all we have time for. I'm Robert Hackett. I'm Jen Wieczner. Go to fortune.com for more Balancing the Ledger. See you next time. 

Meltem Demirors joins The Ledger team to talk Bitcoin, women in cryptocurrency, and how her new firm Athena Capital will bring balance to the force.