I Had My First Liquidation Event!

Welcome back to The Cap Table Newsletter!

This weekly newsletter will share key insights on angel investing, start-ups, and investment opportunities.

Join our Telegram to hear about upcoming events, job opportunities, and connect with like-minded individuals! Also, don't forget to respond to this newsletter with a quick "Hi" so it doesn't get buried in your promotions folder!

How I Got My First Carry Check

After running syndicates for nearly three years, I’ve recently experienced my first liquidation event—and the impact has been eye-opening. While I can’t disclose the company name, this event highlights the liquidity potential in token investments, particularly when compared to traditional startup investments.

Here’s the story: We invested in a company during a private token sale, participating in a Simple Agreement for Future Tokens (SAFT). This allowed us to purchase tokens at a significant discount prior to their Initial Coin Offering (ICO).

Over the past two years, the company has been executing effectively and driving consistent value to its token ecosystem.

A Unique Liquidity Event

Just a little over two years into the investment, we decided to sell a portion of our tokens—around 25%—giving liquidity back to our investors while maintaining the upside on the remaining 75% of our holdings.

This is an example of one of the most exciting advantages of crypto investments: liquidity. Unlike traditional startups, where you often wait 7-10 years for any liquidity (typically through an acquisition or IPO), crypto tokens offer the potential for much faster liquidity events.

Why Liquidity Matters

One of the key advantages of investing in crypto projects through ICOs or SAFTs is flexibility in exit timing. By selling a portion of the tokens early, investors can lock in returns and reduce risk while still participating in the potential future upside. In traditional startup equity, this would be nearly impossible so early in the lifecycle of a company.

For example, if we had made a similar investment in a typical Web2 startup, it could take a decade or longer before investors saw a return. However, crypto markets offer an opportunity for liquidity within a much shorter window. These early liquidation opportunities can create new strategies for managing risk, allowing investors to de-risk while retaining exposure to future growth.

Navigating the ICO Landscape

However, ICOs come with their own risks. Unlike equity investments in startups, where you own a portion of the company, tokens often don’t represent ownership but rather utility within a platform. This can introduce volatility, as the value of the token is often tied to the success and adoption of the platform. ICOs also have faced scrutiny due to a lack of regulatory oversight, meaning due diligence is more critical than ever.

In our case, the company has consistently delivered on its roadmap, and the value of its token has grown significantly. This success enabled us to return the original investment to syndicate members, along with a substantial profit—all within two years.

The Role of Syndicates in Web3

Syndicates have become an increasingly popular method for investing and also for participating in token sales. By pooling capital from multiple investors, syndicates enable individuals to participate in larger token sales that might otherwise be inaccessible. This collective approach not only reduces risk but also opens the door for more frequent liquidity events, as we’ve just experienced.

For syndicate investors, the ability to exit early while still holding a significant portion of the tokens is particularly appealing. It balances short-term gains with the potential for long-term rewards as the token continues to appreciate over time.

A Look Ahead

As the crypto market matures, I anticipate more structured and transparent investment opportunities for Web3 projects. With growing institutional interest, ICOs and token sales will likely continue evolving, offering investors a wide range of liquidity options.

This first liquidation event has been a key milestone for our syndicate, and it underscores the potential of crypto investments for offering rapid returns in a space where traditional timelines would keep investors waiting for years.

Stay tuned for more exciting updates from our portfolio as we continue to explore and capitalize on opportunities in the ever-evolving Web3 space. And if you’re looking to get involved in crypto investments, syndicates can be an excellent way to diversify your exposure and manage risk while taking advantage of this new liquidity landscape.

Resources

If you enjoyed this week’s newsletter - feel free to check out some of our past articles:

• How to Start Angel Investing

• Risk vs. Reward: The Realities of Startup Investing

• Deep Dive: SAFEs vs. Priced Rounds – What Founders Need to Know About Fundraising Options

• Beyond VC: Alternative Routes to Fundraising for Start-ups

• How to Start Angel Investing #2

• The Ultimate Guide to Crafting your Start-up Pitch Deck

📈 Start-Up Investment Opportunities

Please keep this confidential. If you are an accredited investor and interested in expanding your start-up portfolio, we have provided some investment opportunities that are currently active through the Red Beard Ventures Syndicate. The minimum amount to invest per deal is $1k! Please reach out if you have any questions.

PWR Chain: First Blockchain to Create Direct Interoperability with Web2 | Token Warrant

• PWR Chain is revolutionizing blockchain infrastructure by creating direct interoperability with Web2, enabling seamless deployment of programming languages across external VMs, side chains, and smart contracts.

• Testnet live since 2023 with various projects already building on the platform. Mainnet launch scheduled for Q4 2024. PWR Chain uniquely eliminates platform limitations, mirroring the decentralized structure of the internet.

• $6M Pre-Seed raise via SAFT with a $90M pre-money valuation cap and token price of $0.09. 

• Backed by notable investors including Tim Draper’s Draper Associates, Magnus Capital (Astra Protocol, Desofy), Alphabit Fund (Sire), GVG Capital, and Crypto Oasis Ventures.

• Co-founder & CEO Melanie Mohr, serial entrepreneur with 20+ years in media and mobile technology, and Co-founder & CTO Edy Haddad, blockchain veteran with on-chain records for gas-efficient smart contracts, are leading this transformative project.

• Link to invest

OnChain Studios (Cryptoys): Revolutionizing Digital Toys | Dapper Labs Led Series A+ and Backing from a16z and Draper Associates | Cosing Soon

• OnChain Studios is building Cryptoys, fully interactive digital toys on a platform hosting games, apps, and immersive experiences, capitalizing on the rapid shift of children's play to digital formats.

• $2M in sales during beta, partnerships with Disney, Mattel, and NASCAR, 4 major IPs launched including Star Wars and Mickey and Friends.

• Patent-pending COPPA-compliant Guardian Controls for under-13 market, built on Flow blockchain, combining Play-to-Earn games with next-level experiences.

• Strong team and backers: Led by CEO Will Weinraub, backed by Dapper Labs, Andreessen Horowitz, Draper Associates, Acrew Capital, and Coinfund.

• Raising $10M Series A+ via SAFE with $30M post-money valuation cap and token warrant. 

• With traditional toy companies struggling to adapt (Mattel $6.4B, Hasbro $9.4B market caps) and digital play leaders thriving (Roblox $28B), Cryptoys is well-positioned in this growing market.

• Link to invest

xMarkets: Creator-Focused Prediction Market Platform | Polymarket ($1B Valuation) Competitor 

• xMarkets is revolutionizing prediction markets by enabling verified X users with 1,000+ followers to create markets on any topic using AI-driven tools for clarity and efficiency

• AI agent for market creation, $100 fee for quality curation, multiple resolution methods (LLMs, market creators, pricing oracles), and seamless X integration

• Secured KOLs with 10M+ followers, planning September launch ahead of presidential election. 

• Competitor Polymarket valued at ~$1B

• Led by experienced team: Co-founder AJ, MIT CS grad and former Microsoft ML Engineer, previously founded DeFi projects reaching $50M TVL and $1.1B market cap. 

• Backed by notable investors: Wes Cowan (Juice.finance), Paul Taylor (BlackRock), OneFlow Digital founder, Rahim Noorani (Satori.finance), Peter Huo (Whampoa Digital), and Eckhardt Capital. 

• Raising $1.5M Pre-Seed with $15M post-money valuation cap SAFE + $XMKT token warrant. 

• Link to invest

👋 That’s all for now friends! See you next week.

Next week I am going to dive into syndicate and fund returns and why sometimes it is important to take the risk because the reward can be far greater!

In the meantime, subscribe to our youtube channel to see weekly podcast episodes.

💌 Join our subscribers and sign up for this weekly Cap Table Newsletter if you haven’t already!

Disclaimer: The Cap Table DOES NOT provide financial advice. All content is for informational purposes only. The Cal Table is not a registered investment, legal, or tax advisor or a broker/dealer.