BaseCamp 2025 — Let the Deals Flow: VC and Investment Landscape as Told by Investors

[Music] Welcome to Let the Deals Flow. I'm Tony. I lead the platform team which handles support for projects on base. Uh that's most of you in the audience. A lot of you have raised recently.

Maybe you're planning to or you're thinking about GTMs. And so we're very lucky to be joined by uh Maria from Electric Capital, Jacob from 1KX, and Josh and Jess from Seed Club to talk about what they're excited about, what they're seeing maybe too much of these days, and uh any insights on successful go to markets this cycle. Uh so we'll leave some time at the end for Q&A, but um Maria, do you want to kick us off and maybe do an intro and tell us what you're excited about these days?

Yeah, sure. Uh so my name is Maria. I'm one of the uh investment team members. I'm a general partner at Electric Capital. Um it's been really cool to be here.

So, thank you for the base team for inviting me. It's such like a beautiful place to be. Um just a quick intro on electric. We manage about $2 billion in assets. We're an early stage investor.

So, we we're often first check in. We invest at the seed and series A stage. Um, and we were started in 2018. I think one of the things that makes us pretty different. Um, and what made me want to join the join the team, I I didn't start off as a VC.

I had my own company before joining Electric and um was at Microsoft before. So, I had a product and engineering background. But I think what's really interesting about electric is um everyone on the investment team has either started their own company or has been early like one of the you know earliest members of a company or has an engineering background and I think that changes the way that we work with founders and how we think about um and how we think about our relationships with founders as well. Um talking through some of the things that I find interesting. I'll try to keep it brief.

Uh, but I love digging into this. Um, I think about what's interesting in terms of what I feel like are the biggest trends and what's changing in the world that's going to have the biggest impact. Um, the things I'm paying attention to right now is I think the adoption of stable coins is only going to grow. Um, and that has a lot of downstream effects from finance being more global to more dollars seeking yield on chain to all sorts of interesting financial products that can come out of that that I I think are super underexplored. Um, despite how much attention is on stable coins, I think there's a whole, you know, 90% of it that people aren't really talking about.

Uh, second, what I find super interesting is finance being treated as entertainment now. And I think there's a merging of the two and you can see that through prediction markets and per markets and sports betting um getting more and more popular and whole host of implications there as well. But that's a super interesting trend. Um and then the third one is the rise of adoption of AI and so I think with crypto as effectively changing money into information it um lots of interesting things there. So those are the three areas I'm most interested in.

um quick question like what is um what is not getting attention that should with with stable coins?

Oh man. Okay. So I think first of all the number of holders for stable coins is really going to rise. Um, so like stable coin issuance is already 60x in the past five years and 21% of the world population are living in areas with more than 6% inflation. And so I think if you believe that for the first time in history, people have access to the US dollar.

There's going to be a lot of dollar holders. And so right now most stable coins focus on like uh I see a lot of white labeling solutions, right? So, it's like, hey, allow a bank to issue a stable coin. I think that infrastructure is certainly important. But I also think if you believe we're going to have billions and billions of people holding the US dollar all of a sudden, they're not going to passively hold it.

They're going to want to do something with it. And so, uh, there will be a lot of yield seekers. And so, interesting niche types of yield is certainly one thing that comes to mind. um I infrastructure for people in emerging markets um holding stable coins. I think it's going to disrupt a lot of incumbents.

And so we're probably going to see like uh you know, for example, distribution is going to matter way more than like a local power structure. Meaning like Mr. Beast can go and launch Beast Financial and reach a lot of people globally. Um, and that's going to bypass local banks and that's going to bypass all sorts of kind of like local financial infrastructure. So, I don't see a lot I mean, if anyone's building that, please come talk to me.

I don't see a lot of emphasis on that. Um, so those are some examples of things without rambling too long.

Jacob, what's hot these days?

Oh, yeah. We got to do a little uh mic passing one. Yeah.

Um, yeah. Hi, I'm Jacob. I um work at 1KX mostly focused around um consumer and social investments. So that's probably where I'm most excited about. Um but uh in terms of other things like definitely quite excited about DI um we're seeing a lot of a lot of progress there.

Um and and it's actually pretty pretty fascinating to see, you know, instead of these like traditional structures, um we're we're seeing like decentralized groups of people that are very passionate about a specific matter and then being able to um you know, conduct the research, uh be very nimble, uh be a lot more costefficient than for example big pharma is try and reuse um compounds that have been out of patent for potentially new use cases. Um the other thing is um quite recent quite excited about like uh using deepin networks for uh things such as drones uh and being able to like create like for example a mesh of like drone docks across the US for things like you know looking at the critical infrastructure uh solar solar panels power lines things like that and and obviously in social which spend the most time and consumer um pretty excited about like net new social apps uh like builders really trying to leverage crypto primitives uh to introduce something uh brand new. Um I think like we're long overdue uh a brand new social network. It's been quite some time since like probably Tik Tok uh being the the last sort of big one that that really sustains itself. Um yeah, that's that's a little bit about uh what I'm excited about right now.

Yo, what's up? I'm Josh. I lead early stage consumer investing at Ed Seed Club alongside Jess. We also stream every day at 11 am. Hopefully some of you are watchers.

Follow us. Follow us. We need

follow us on Twitter. Need followers. Um

like right now I don't see you opening up.

Yeah, we're pausing this panel until all of you open your phones. Uh yeah. So we've been around since uh I guess for five years. Made a bet on the consumer opportunity pretty early. Saw a lot of you know all the support systems and funding going into infrastructure.

I think got were pretty convicted that owning the consumer relationship and all the leverage comes that comes from that was going to be the killer opportunity in crypto and you know awesome to be here today where I think that's being proven you know weekly. Uh I think really the thing I'm most excited by is you know people using tokens to just kind of redefine how value is created, distributed and experienced on the internet. I think, you know, tokenizing stocks is great, but I think inserting markets into places markets have never existed before is by far the most interesting and disruptive opportunity. So, anytime we're talking to a founder who has a unique insight into some market that I have never even considered before, that's that's when I get excited. So

yeah, I think that even the premise of this question is kind of funny because I want to invest in things that I had never considered before and are just crazy new ideas that you have probably been running at in your free time for the last while and built conviction in and you get to introduce it to us the first time. So I think that the thing I I like the least about the crypto market is the fact that when prediction markets are hot, we will see a thousand prediction market deals and it's the people who were building in that before it was even hot that are the ones that you really want to fund. And it gets very hard to find those people in the noise. So what I want I I don't know what I wish I could find today. I want you to come tell me that because to me that is the most exciting opportunity.

Have you heard any crazy recent ones like any of these ones that you just sort of mentioned?

Yeah. And one that we're late to is just like spatial computing for robotics. We had a guy on the stream on Monday who blew my brain around sort of robotics in in China. I know there's people out that I think there's a narrative that's bubbling up around robotics tokens right now. I don't know enough about what those things do to whether or not they make sense, but this idea of automation and AI and the economies sort of driving and and allocating resources.

Uh yeah, I could talk to that guy for another four hours sort of thing. So,

could we get maybe a little shorter, but like spatial computing for like that sounds pretty out there. Can we just get a TLDDR on that?

I'm not the guy to do that. You should go back on Monday and watch our show. It's great. But I mean the idea I guess is that there's uh right now AI is kind of dumb because it doesn't have all the sensory input. It might be very intelligent but it doesn't know where it exists in a room and that if you can have all devices know where they exist in a room or on a roadway you can start allocating resources that maybe aren't market priced right now like the ability to park somewhere or cut in somewhere as a an you know autonomous vehicle uh and do that with with the market price.

And I think that's interesting. that's mostly being applied right now from a data I guess aggregation point of view. But yeah, where my mind was breaking is how that might evolve significantly as more connected devices that are smart come online.

Okay. Well, I see some uh uh actually deepen fans in the crowd that I recognize. So, uh for the Q&A, you'll have some follow-ups there. Uh going into the uh you sort of um led into a good segue um Jess on things you've seen too much of. Uh maybe prediction markets as one example.

rest of the gang, like what's sort of tired? What are we seeing too much of? But I'm also curious like when you start seeing clones, what differentiates, you know, one of 10 that makes it 10x better that's actually worth worth investing in.

Yeah. I mean, I don't need to list off all the categories that are hot. I think you all probably know them. Um, I mean, I think the one great thing about something breaking out is, you know, there's proven kind of market demand for it. I think you know poly market has proven that and I think a lot of people are kind of emerging now seeing you know kind of the longtail social opportunity around prediction markets and I think the you know the thing we see a lot of anytime something gets hot is we're going to go do this same thing on some other chain and you know maybe some people will fund that that's not what gets gets us excited ultimately it's the kind of non- consensus ideas that take you know five years to become consensus that ultimately lead to to world changing changing companies.

So I think really the thing that we want to see is that you know this isn't an idea that you've had for a month because prediction markets are now hot. This is a thing that you've been obsessed about for five years. you have some, you know, unique set of experiences, some unique insight into, you know, how how the current products, you know, I don't know, there's there's still a gap in the in the market with with current products and, you know, you're ready to go do your life's work and dedicate 10 years to figuring out how to how to find the right form or product to to kind of bring your insight to market. So,

so are the fast pivots a turnoff then? I think the for us kind of I think you know obviously you know YC and many others have kind of made a name for themselves there. Uh, I think I think having some some unique insight that you're you're genuinely obsessed about is very core to doing all the insanely hard work that it takes to bring these products to market, especially in crypto, especially in the last 5 years when you know infrastructure and everything was like the the number of hoops you had to jump through to bring a crypto product to market. If you weren't obsessed about the industry and the opportunity you're running at, it was very easy to to give up. So, I think it's it's I think

and there's two types of pivots, right? If you look at say Zora, Zora has pivoted thousand time. I mean that's maybe a slight overestimate but they pivot regularly but that core insight that they've building towards has been laser focused from day one. And so think what is is this core insight the thing that has come to you because there's an opportunity where you think you can get funded or is it something that you've just been infatuated with? You can see that through often where people have worked before or projects they worked on before etc etc.

Jacob, Maria.

Yeah, I think prediction markets is it's definitely something that we've been seeing the most of the amount just sheer amount of dicks and and it's kind of like a it's natural thing. Uh you see these mega rounds you kind of think okay I'm going to do that and in many ways it like uh it reminds me remember FTE like frenche was a pretty janky UX and the amount of like new social products after that that were like oh we're doing frenche but the UX is better and that was like the core value prop. Um, and I I honestly think like any sort of innovation in crypto that, you know, finally has some market demand, there's going to be like a leader depending on or maybe it's going to be one leader, maybe it's going to be a few. Uh, but then there's going to be a lot of people like just following on. Um, and and very often it's actually quite hard to like pick if there's there's going to be anyone that's uh that actually makes it.

I think it really takes time for a market to mature and for people to realize, okay, how can we like disturb uh disrupt the the incumbent? how can we create a better prediction market than um than for example poly market that also has just a huge sheer amount of money. Um so I think somewhere around the towards the end of like over excitement of specific categories is where like new players emerge that have like a completely new plan and completely way like a way that can to how to rebuild it, improve it and and deliver like a 10x experience.

Yeah. I I'm not sure that oversaturation is necessarily a bad thing. I I feel like there are certain good ideas that need to meet the right moments and so people will try the same thing over and over again like Vine was really interesting but really like Tik Tok took off. Um, and it's yeah, I mean I you know I I think you know even with NFT marketplaces like OpenC was an early winner but that doesn't necessarily mean you just kind of stop there. A lot of teams kept going at it and so like you have Magic Eden in the Salana ecosystem.

You have blur which kind of like took the idea of an NFT marketplace and just shifted it towards a very different group of users who are uh traders in NFTTS. And so I think it's less about you know are you running at an idea that feels like oversaturated or tired but more do you have a belief about this that's different um than than other teams and um are you a little bit lucky with the timing as well? I do think one of the most exciting things is when you know something really breaks out that introduces a new mechanism and then you see teams building in maybe adjacent categories that see that mechanism as a way to as like the right maybe market formation or whatever to go run at their idea. So you know pump fund was very very inspired by fentech for example or you know virtual quote pairs ultimately led to Zoro realizing that that's maybe a great market like structure for them. So I think it's always I think very important to look at the things that are breaking out and like the nuances in in how they've built because I think very often there's all these like adjacent opportunities that now get emerged when there's some kind of simple but you know core innovation that that unlocks something adjacent to it

and I think there's like a pretty interesting opportunity here in terms of like um I think a lot of these like hot ideas there's actually a lot of like high energy founders that can like be successful maybe they'll have to eventually pivot but like the pump guys and and a bunch of very successful founders of this cycle they were like in NFTs, NFT and all of that and and these are also like these kind of interesting edges to observe. Uh because very often these uh although you know the the market has kind of tapped out at that uh point in time on on NFTs a lot of these people came in decided to introduce a new form factor let's do a launchpad and things like that and are now wildly successful companies. Uh yeah, pump famously uh NFT AMM caviar before pump quick pivot. Um what about what about distribution that's worked this cycle? Um there like there have been all these metas the last cycle like you mentioned blur.

One of the things uh blur was so popular because they had this fantastic points program and points are uh you know kind of like hit or miss these days. Have you seen any distribution channels or strategies that you guys think are sort of not sugar rushes but um more more durable?

Yeah, build great products. I mean, I think we just have uh we're on the cusp of mass adoption or at least the early majority is is coming in and you know, I think points programs and these things are just going to look so quaint and and bizarre I think as we move forward here. Not saying maybe there's an interesting way of of doing it, but I think like the we have perfect distribution of interesting ideas. You know, you get the extreme takes, the most interesting things come across your feed all the time. And so, uh, you know, if really your goal is to go get to that first thousand users who really, really, really, really love your product, distribution starts to solve itself, at least in that early stage.

So, I think that the chasing the sugar rush and the points programs and the launching of the tokens, that meta is very much played out. um I don't think it was set up to build lasting products for the most part. Very few have ultimately sustained after that. And so I think it this is maybe uh good a good era to be building in also when maybe you don't have the advantages that you had by just being one of the few people that were layering a token into your product. But I think ultimately that's going to be very very healthy for our space.

And so I don't think there are magic one-off hits here. I think you need to go build a great product that has a great business behind it that people then want to use and own the token of and you're going to have a good time.

Yeah. And I think there's this belief in crypto that I don't know if you don't have 100,000 followers or you know you're not top of Kaido mind share or you know a bunch of people yapping about you like your product's not working. And I think in in more cases than not getting attention before you're ready for it is actually harmful. you have a bunch of people who you're not actually building for now using your product and trying to pull it in ways that you know aren't you know in line with kind of your core insight or who you actually want to go serve. So I think the like to Jess's point like who are you building for go like relentlessly serve the hundred or 500 or thousand people that really care about that thing and if you do that really well then the rest is going to take care of itself at least in the early days.

Um, yeah. Well, I I actually ran this session where we talked to a bunch of our founders and everyone stood up and presented how they got their first thousand users. Um, and what they thought, you know, did like the good old DMing honestly is just it's tried and true. Um, but it feels like just from that session, let's listening to all these founders talk, I think the number one takeaway is don't go after the wrong founders or don't go after the wrong users. um like you know don't don't get too excited just because someone's you know willing to talk to you or test your product like make sure you're going after the right community of of people and and it's it sounds very uh I think it sounds just like very obvious when you say it but honestly pretty hard to do.

Um, but yeah, good old DMing, you know, uh, stalking people on DBank to see what their wallets look like. U, a lot of unscalable things.

Yeah, crypto Twitter is not a target user base. Crypto Twitter is that like it's not a target user base. You need to get way more granular than that. If you just release it into crypto Twitter and expect everyone to use it, you're not building for anybody.

Yeah. I mean it's um I think we've really like kind of tapped out on uh on how many users can we get within like the the very crypton native crowd. Um it I kind of came like my very first investment thesis was around like social graphs and and it was basically this like copium around how like you can launch successful apps on top of a social graph. You're going to get your users going to be successful. Turns out it's a lot harder.

These social graphs aren't like actually growing fast enough. you need to be like really uh really experiment uh on like growing the pie and trying to acquire net new users. Experiment with like web two social channels. It's it's actually super important. I'm like experiment with advertising.

Uh I'm seeing like crypto products right now. Uh we totally like kind of on like advertising and they're like we're not going to have that in crypto. It's one of the most successful like business models out there and some of the largest companies in the world are actually benefiting the most from advertising. That's that's like their core revenue driver. um you really have to try and get outside but really think of like what's the core value prop uh to to a user that isn't cryptonative isn't there for like a potential token incentive and um I'd say um the best sort of case study on that of like how can you become top of mind and not even just in crypto circles but outside of this is is pudgy penguins uh like the the the the the game they've mastered in terms of like distribution being top of mind people sending themselves Venmos and sending Pudgy Pinu even not knowing this is like cryptonative IP.

Um, you really have to experiment with those channels because uh we need to build for for a much broader audience.

It's interesting though because that's um that's a bit different than Maria was saying because uh you were focusing more on just like do unscalable things like just DM people, get user feedback. Um which is sort of on the opposite spectrum of like the uh the ads. By the way, shameless spindle plug if you're interested in ads. Uh is Austin in the room by chance? Okay.

Well, well, DM me and I'll connect you to Austin. Um, he's the uh BD for for Spindle. Um, but uh do you have like a standard playbook for like the teams that are about to launch? Like is it a combination of like just get your first hundred users via DMs also send pudgy pen penguins to everyone?

I mean, ads is just that's like fantastic advice. I think going outside of crypto is is really good advice. It just depends on who you're targeting, right? Like if you're trying to drive TVL, I I'm not sure that going outside of crypto unless you have some, you know, unique uh distribution channel to institutions, like that could be really interesting. But, you know, going viral on TikTok won't bring in the TVL necessarily, and so you may need to go through more cryptonnative channels.

But if you're targeting a um you know, if if the people that you're targeting are on TikTok, then that might be the that would be the right channel, right? if the people that you're targeting I see um I see crypto ads on in like the subway in New York City now and none of them mention crypto. So it's like okay if you think your users are actually riding the subway in New York City like yeah maybe run an ad like that that might be really interesting. And so I think it really comes down to just knowing really really well exactly who it is that you're trying to talk to and and figure out, you know, what channels are those people on, how do you reach these people? And so that could be cryptonative, that could and and it could be unscalable or it could be actually quite scalable and maybe run ads.

Do you have any advice um for actually how to identify people? Because especially like with um DeFi founders we talked to, they can find these people on chain. It's very hard then to like link them. What's their Twitter? Do you have any strategies?

Uh maybe ones that you're willing to share for like how you actually find individuals to to reach out to.

Yeah. I mean, two things. One, I think being being like a a cult leader of the type of person that you're trying to build for is very important. So, you need to be, you know, marketing is is talking to a a walking parade, not a standing army. And you just need to have a something really interesting to say and just relentlessly repeat that.

And you know I think with today's algorithms if you do a good job of that and people care about that then you know some of them will will see that and hit you up and you know hopefully you know onboard them. And I think the other thing is just you know what Maria was saying earlier is just everyone is constantly yapping on Twitter. you can just go find the people who are talking about the stuff that you're building for the, you know, the the interest area that you're building for, the fandom you're building for, and DM them. Like, I think DMing people, setting up a group, and aggregating those people in one place has been central to all of the breakout crypto products that that we've seen.

Yeah, I I think I mean, there are some DeFi founders who are really clever about this. And so these are just some of the things I've I've seen and and heard about, but um it's really it it seems like it's really about breaking into the right groups. Um and so there's a few ways to do that. One is yes, it's hard to match wallets to Twitter identities, but you can actually match a fair number of wallets to Twitter identities. And so I think even finding like five of these wallets um and DMing them and seeing if you can get a warm path to them breaks open that group of people.

You can start bringing these people in as um you know you can raise a small community round and get some of these people in as angel investors. You can fight your way into some of these telegram groups where you access you know these people as well. And so I think it's um it you know it's basically it feels like it's like a there are these like closed cycle silos of groups that you want to break into and so just like all possible attack vectors you can use to break into these groups.

This concludes the presentation com component and we will now move into Q&A.