# BBW25 - Day 2 - VC & Investment in Crypto: Capital, Strategy & Go to Market

- Channel: [Boston Blockchain Week](https://streameth.org/boston-blockchain-week)
- Date: 2025-10-07
- Duration: 29:29
- Watch: https://streameth.org/watch/yt-o9rWzQ4yLJs
- YouTube: https://www.youtube.com/watch?v=o9rWzQ4yLJs

## Description

Boston Blockchain Week 2025 - Day 2
Wednesday, September 10, 2025

Panel - VC & Investment in Crypto: Capital, Strategy & Go to Market

Leading venture investors examine not only funding conditions, valuations and exit strategies but also how they help portfolio companies find product market fit and scale. The conversation will cover capital deployment in the current macro environment, which sectors offer the best long term opportunities, and practical go to market guidance—ranging from regulatory navigation and community building to distribution channels and growth metrics. Attendees will gain insight into what VCs expect of founders and how investors support their portfolio companies beyond the check.

• Keli Callaghan, Partner, Arrington Capital
• Brian Li, Senior Investment Analyst, a100x (moderator)
• Ken Mooney, Member, Chain Reaction Boston
• Jeremy Wallis, General Partner & Head of Venture, Chainview Capital

## Transcript

and the relationship building which is a very important part of this but now we're going to get back into the program. Uh we're going to have a conversation on a very important component around the capital from venture capital uh investment perspective. So I'm going to welcome some friends to the stage. Uh Kelly Callahan who's a partner with Arrington Capital. They're a great partner and friend of this operation this week. We have Brian Lee who's a senior investment analyst with A100X also a great partner to us who's going to moderate this discussion. We have Ken Mooney who's a member of Chain Reaction Boston, also an adviser to our Cubic Labs accelerator program. And we have Jeremy Wallace, general partner and head of venture with Chain View Capital, also an adviser to our Cubic Labs accelerator program. Please join me in welcoming them to the stage. [Music] Well, first of all, thank you to Cubic Labs and everyone here at Boston Blockchain Week for being here. I'm very excited to be on this panel. We have three incredible investors and without further ado, I'll let them kick it off with their intros and tell them a little bit about, you know, how they a little bit about their background, a little bit about their funds. So, Ken, would you like to start? >> Thanks. >> Thanks, Brian. Um, so I'm a longtime angel investor, but really the last five years I focused on blockchain web 3 and cryptotype related investments. and we're doing the investing through a local angel group called Chain Reaction Boston. And uh as my side gig, I'm a professor at Suffach University. I teach intro to financial technology and blockchain revolution. >> Awesome. Chain Reaction is a great group. Everyone should join. I'm Jeremy. I'm with Chin View Capital. Uh I've been at a few different firms in crypto for about eight years now. Uh focused on early stage crypto investments, primarily trading technology and picks and shovels, uh financial services companies. >> Kelly Callahan, I'm a partner at Arrington Capital. Prior to Arrington, I was a CMO at Algarand, a project here out of MIT with Sylvio Macaulay here in Boston. Uh was their CMO for four and a half or so years. And then I joined uh Mike at the Fund. We're a hedge fund. We have both liquid trading as well as venture, private venture investments, probably well over 300 at this point. I love working with early stage founders um and sort of giving back and making sure they can bring their stuff to life. >> Awesome. Well, want to kick things off with the theme of this conference. You know, AI has definitely had its breakout moment and we've seen over the past few years blockchain AI weave into the investment narrative, whether it's through decentralized compute, data labeling, and cryptographic identity. How are you guys seeing blockchain integrate into the AI tech stack, and how does it shape the bets you're making? Kelly, would you like to start us off? >> Oh, right into it, huh? Uh, listen, I think there's a healthy balance between the two. You know, someone asked, I forget what podcast I was listening to earlier this week, and it was like, is AI going to impact crypto or is crypto going to a impact AI more? And there's a there's a nuance to that, right? Because I think it goes hand inand I'm not sure that I would pick one versus the other. Uh I think that um AI being decentralized is hugely important and I think that crypto gets to disrupt AI and sort of keep it in check. Uh and we're seeing that. We've invested in a couple companies doing decentralized inference and sort of looking at those models. And then on the flip side, AI makes crypto much better, right? So you've got um you've got uh companies like we've got one Giza who's creating AI agents that are, you know, going out and doing your yield for this. We talked about this on a panel yesterday where uh it'll be it it'll be very easy for for anyone regardless of their background and financial uh understanding and knowledge to come in and just say okay this is my risk profile this is my tolerance for this this is my length of time and outlook that I want to have go do and that's it right and those things will just those AI agents will just go and and make crypto and the yields and participating in all that a lot easier so I think it's it's handinand I think it's exciting times that we're in here for I think there's a lot of unknowns. Um AI has certainly enhanced everything, right? Um hacking has always been an issue in crypto. Now Lazarus and other groups are using AI to you know integrate into their uh hacking. Um there's certainly some new business models. Uh but me personally, I've only made a few investments. uh wi with the two one in the data space um and the other around security. It's a company called test machine. They have a partnership with Coinbase and essentially what they do is put your smart contracts into an AI model that continuously attacks them uh which you know theoretically enhances security. Um so I I think AI is certainly converging with with crypto and blockchain. Uh but more broadly speaking, it it's a tool to enhance, you know, existing business models. >> Yeah, I guess I'd echo that too. I'd put uh blockchain in the front seat, unbiased, of course, and AI is kind of a compliment. You know, it's really a good tool. Um I don't know if people saw there was a recent MIT report on the ROI on AI and it was really poor. And I think part of it is that AI may be applied in in the wrong places. I think AI is really good for things like automation u predicting trends enhancing security. So when when someone brings a proposal to us and it has AI associated with it, I'm just looking at that as really as a tool that could potentially make it better. And quite frankly, um, you know, I don't think there are any angel groups I know of that invest strictly in AI because the valuations are crazy and I don't see how you can even invest in one at this point. >> Could not have said it better. Um, well, I would like to pivot to the hottest narrative of the past 18 months, which is stable coins, which are uh cryptocurrencies pegged to fiat currencies. And we've seen over, you know, the past 18 months both enterprisizes and financial institutions build their own stable coins as well as layer ones that are designed for stable coin payments. How do you see the the stable coin landscape shaping up in the future and how has it impacted the investments you've been making? And would you like to start? >> Yeah, so I think we're seeing more opportunities that include stable coins. Certainly the Genius Act makes it a more legitimate type of thing. Um, you know what I'm wondering is that stable coins there could be a lot of it's probably good to have a lot of competitors and not just have a few large stable coin providers. But I'm looking at it I'm saying you know stable coins if the large inst it may make it easier for the large institutions. The large institutions get involved in stable coins and it can help with custing assets and doing things. And of course we know that stable coins are great for global transfer types of things but I think you know the big money is always in the capital markets you with the large institutions. Yeah, I think um from a macro perspective, speed of transactions has con continued towards instant settlement, right? Uh started out T+5, got it down to T+2, now we're, you know, somewhere near same day settlement. Um, stable coins allow for instant settlement and I think they're going to eat every part of the economy. Um, so you know, global globalization is certainly not slowing down. Um, we're going to be, you know, instantly settling every transaction um that that, you know, we're a part of. So whether it's escrow, crossber payments, u I think stable coins is, you know, integral piece to to all of that. >> You were talking about institutions. Do you think that any of the big retailers or non-financial institutions come in as big stable coin players that disrupt anything and shake some up? you know the the large institutions the the uh big tech as I call them you know Amazon and Google and and Apple and those types of companies they they don't like to get their hands dirty I would call it they like to have Goldman or one of those small companies do a lot of their that low margin stuff but if they get involved I see them maybe getting involved with a partner you know that knows the business really well but you know if it's a if the business is growing And if there's more transactions in stable coins, they'll certainly be involved. >> Yeah, I think the number of players increases here. It can't just be USDC and Tether, right? I think there's going to be some We've invested in a couple that are very specific to one particular industry segment or rail between different geographic areas uh in the world. We've done some that have unique yield opportunities. So, I think there's a lot more opportunity for stable coins and infrastructure and what they bring. I think a lot of the u middlemen so to speak like Stripe uh realize how much money Tether and Circle are making and are are you know making a big push there. Uh Google announced that they'll be getting into stable coins as well. Amazon um I I think the economic incentives are there now the legislation is in place that it allows them to to enter the arena. Um, certainly there there's a bit of catchup to to get to where Circle or Tether are at, but once they turn it on, it it should be a seamless integration and and you probably won't notice a big change, you know, when you're checking out uh on Amazon.com. Um, you know, the the tech might just run in the background. So, that that's how I see uh some of those larger firms going to market. You know the the last thing one of the previous presentations talked about stable coins destabilizing the banking market too much of a flow goes towards the banks because if you can earn money someplace else why wouldn't you do it rather than leave it at JP Morgan. So if something like that starts to happen deposits flow out of a as an ex banker you know you need deposits right if that starts to flow that's when probably the government steps in probably. Well, I I think we're not even we're talking about the institutional level, but think about on the individual level and what stable coins open up. I mean, that's still clunky if you want to, you know, take more than what are the limits on Venmo like a couple thousand dollars out a day and like, you know, you can't do wires for more than XYZ or it takes three days. You don't they don't even tell you if it actually ends up coming through versus even like for individuals what it opens up and you know, the government might step in or you know, stable coins might just become better. I think right now BO and Anchorage are really the only two fully regulated custodians. Um they'll continue to see, you know, quote unquote deposit flows uh into those products. Um there there is a possibility that they even start acquiring small and mediumsiz banks uh to you know tag on that that additional regulatory um approval. Um but yeah, I I think the banking system is going to look a lot different in five or six years from now. >> Really good observations. We saw Anchorage about a couple months ago acquire Mountain Protocol, which is a stable coin player. Um you guys touched upon some amazing points. One of which was the investments in different stable coins in different regions and the ability to find product market fit in different areas that we may not anticipate. We have some amazing founders here. Would love to get you guys' advice on how these founders can find product market fit both in the consumer sense and in the enterprise sense. >> Kelly, would you like to Jeremy? Yeah, Mountain was actually a previous investment of mine and um going after a high yield stable, you know, certainly doesn't work in the US yet, but for you know, lat Latam, Africa, uh emerging economies where access to dollars is difficult, um a product that not only allows you, uh you know, access to a stable currency, but additional yield on top of that, um simply through a phone I think is an incredible product and you know that's why I think Anchorage made that decision. Um and you know the they're rolling the global dollar network out um not only in the US but abroad and and there's a lot of uh incentive for you know individuals to adopt. >> We Jeremy suggested that we do mountain and we did not do mountain protocol. Uh thanks Jeremy. uh the um but we have invested in a couple of stable coins uh before and since I think if you step way back there's a takeaway that's we're still making investments in infrastructure because it can there's still areas of improvement there whether it's dev enablement dev tooling infrastructure products um we're still doing infrastructure uh it might be industry specific it a lot of times it's stuff that we can use as a hedge fund that makes our lives easier um but there's still infrastructure, there's still security that covers a whole bunch of different things in web 3 and that's still happening because there's a lot that still needs to be built and everybody's okay building it. I think the other thing we should talk about on this panel if we're doing advice to people fundraising is sort of valuations and how you run and play that game. We've seen uh this year has probably been a lower activity for us on private early stage ventures because capital is going to go where it's treated best. And if it's treated best, it's going to have better returns. And when you have uh opportunities like some of the digital asset treasuries that are very quick turns and very faster much faster paths to liquidity versus a private early stage startup that has you know really big dreams for what that valuation is. It's very easy for us to make that decision on where to place capital. Um so I think valuations have been high. I think they're starting to come down and I think that'll shift. But I would just say you know be aware of that and it's not just what's happening in startups. It's like look at what other people's opportunities are in the segment that you're playing. >> Do you want to continue with valuations and fundraising or private market fit? you know it as an angel investor we're kind of the bridge I think after friends and family and you know uh sweat equity and that sort of thing and after you've exhausted the money from your family you know u you need someone sometimes to bridge you to to venture capital and so we we always see applications you know that are preede sometimes seed but usually preede so they're very early on it's very hard to invest in a company when there's no revenue revenues, no subscribers, you know, so uh no customers. Um so one of the things I look at, you know, you want to have a good team, right? If they've done it before, that's even better. Uh you want to have a market that if they're successful, it's going to pay off. I mean, sometimes you see uh opportunities, but they're in small markets, and even if you're successful, it's not going to pay off. So um but the thing I always look at that it seems like the failure uh most of the the companies that failed because of this they don't have a good go to market plan go to market because it you know let's >> 100% agree with that totally >> I mean why why do companies fail they don't have customers they don't buy the product you may have the best product in the world but maybe there's a few other ones already out there or people aren't going to switch or whatever or you know it's a customer discovery get that product market fit the best one you can be able to pivot you know still lean startup stuff and but if you come to us and you have a few customers or you have some revenue I mean I always think that's a step up and in and getting angel investing >> I think founder market fit too which is just a part of go to market um will they be able to sell this product in in the vertical that they're going after and you know will those customers respond well to uh their background ground. Um especially now with regulatory movement, um a lot of institutional capital and companies are coming to the table. They're not going to interface initially at least with an early stage startup. They're going to go to established players that either have a solid balance sheet reputation or, you know, a background in that. So at the earliest of stages uh h having the proper founder that is coming from uh the vertical that they're building in I I think is so crucial. I think you could also have founders who are very technical and like you know I've solved this one mathematical problem or this one thing that could change the world here. But if if if they're not the go to market person, if they're not the public evangelist and they're also not willing to bring in a co-founder or bring in someone who can work with them on that or be that partner for them, like there's a red flag there, right? Like not everybody's good at everything. I know what I'm terrible at, right? And I'm I'm good with that. But the um we see founders who are we've se invested in founders who are very open to partnering with someone that's stronger on the the go to market side and they recognize that and they're willing to like talk about how that's not their strong suit. And then we've got other founders that we'll pass on because they're just very adamant on like this is it and it's just going to organically grow and people are just going to come and find us and use it. You know, you know what's kind of interesting is that after you raise the initial capital, maybe you get a grant, you know, from some place like Cubic Labs to put in a plug for our host. Um, and they get the resources, they get off the ground, they get a little angel investing. Um, and you want to get to that venture capital, you know, um, I think you got to show traction. You got to show some sort of traction to convince people that you've got the right idea. Um, and what we what we like to do with chain reaction is we like to know some of the venture capitalists that are out there because you got to think about the next funding round too, right? Because um, no one's going to be able to raise enough money initially to get you through all the way. And if you raise enough money, you've given away your company probably. >> I'm glad that we touched upon both fundraising and go to market. I guess something that falls somewhat middle of the two is A large part of crypto companies journeys are the token generation events or TGES. When advising your founders, how do you what are some best practices that you give them as they approach the token generation event? >> Well, um I think there are so many tokens out there, right? If your token has utility, I think it's worth more probably. I mean, I kind of look at tokens as kind of an add-on. Um, I'm an equity investor, you know, the SAFS. I'm not as interested in that. I'm not saying we wouldn't do one, but I like the idea of if you're going to do a safe, it's got a warrant, a token warrant or something. And I also think, you know, liquidity is an issue. And then you got regulatory things you have to think about with token uh issuing tokens. Yeah, I think optimizing for a long-term hold is the most crucial component to the token because even if you have an incredible team, great product, um if there's no incentive for the community to buy in and not sell out in 6 12 months, um you know, that that liquidity dries up and um I'm sure we're all aware of several dead tokens out there. Um, hype is a great example. I I'd say stick to, you know, proven token models. Um, Revshare, you know, obviously in the US it's uh unclear where that's going to fall from a regulatory perspective, but um I I see utility tokens, you know, being involved in in sharing of profits, etc. >> Yeah. I mean, uh, we're big fans of tokens because we think it's, uh, there's different liquidity models. There's different economics that can more easily flow back, but it comes down to like you got to do it right. You can't just tack it on and be like, I'm going to launch a token. Let's go next week. Yeah. Tuesday. It's got there. You got to put the thought into it. It take it takes months. You got to talk to everybody that's come across and been involved in your project, your investors, your customers, people that haven't used you yet. What else is going on in the market? And you have to build out these tokconomic plans that actually make sense, that are transparent, that have value acrruel back to the participants and the ecosystem. And it has to be like a wellthoughtout program. It can't just be shoehorned and and it can't just be an add-on, right? Um, and we've seen some companies that have had very thoughtful uh approaches to TGES and and the tokconomics and the utility of it. Uh, and that makes a huge difference. And there's I think I think the other thing to add is just, you know, the the the token launches right now and the exchanges. there's a lot of shenanigans and they can get very expensive and it's not super clear and there's a lot of percentages that are given to those exch I think that is all really hard and I there's got to be a better way and I don't know how that plays out over the coming years. >> Absolutely. Um I have one more question then we'll open it up to the audience for questions. Um something that really stuck out to me was Kelly's comment about investing at the infrastructure layer. Unfortunately in venture being when you're too early that unfortunately also means that you're you're also wrong in terms of investing in the growth maturity of the crypto space. How do you see the investments in infrastructure versus middleware versus application layer playing out today as well as two to 10 years down the line? >> Yeah. Timing timing timing conversations. Uh we're still we're still doing a lot of infra less on the apps and consumer apps. Uh we've done very minimal on on the DPIN stuff and you could argue that's a little more consumer appy. Um and it's it's really because those the value acrruels like where the values coming back to particip participants of the network haven't always made sense in a lot of the stuff that we've seen. Uh and so we haven't we haven't done too much of it for what it's worth. >> How I think about crypto is strictly you know geared towards a financial tool. Um blockchains are a ledger that solve the double spend problem. So really I think all infrastructure has to have a component of that. Um certainly that is going after financial markets. um maybe decentralized compute and some of these you know newer ideas um will come to fruition in a couple years but uh for me personally I I try to keep to the the financial perspective >> do you take that approach on a global basis or US only does it matter do you think >> global you know I guess infrastructure and by the way in preparation for this panel I just went back and looked at the last 50 or 60 applications that we got and by far infrastructure was the ones I saw the most tokenization and then DeFi those are the the three that we've seen in the last four or five months probably infrastructure I guess what I think of is you know in a way it's kind of bare bones right now right there's a I I look at where are the biggest problems who can solve those problems you know where's the flow because if you have a gigantic flow, that's where you can get make revenues, right? You can make money off off that flow. So, you know, I think interoperability, right? You know, um being able to go across platforms, that's a huge issue. I'm just onboarding and um fiat going from fiat to crypto that that you know, I feel like uh sometimes we're, you know, and I'm a Neanderthal when it comes to that. We're we're at that stage. Um so I look at that's how I look at infrastructure. What's solving the biggest problems? >> Fantastic. Um I want to give the opportunity for a question the audience. >> Hello. Thank you so much for speaking today. So my startup is early stage. We are have launched for seven weeks. So not very much track record yet. But we already have a few customers. We have some revenue. And we were told by an adviser that we trust that we should actually wait until we have 5 million in TVL before we want to do a big retail push. What do you think about that? >> You mean organically grow to that 5 million and then spend money into increasing it your next five or 6x? >> Yes. Yes. >> I think that's logical. Uh I think that your earliest um users adopters uh are going to be the ones that are the most brutally honest with you. So, I think what's really important in that first five million of TVL is to figure out how they're using it, why they're using it, what they're doing, what their behaviors are, what feedback they have, because then spend the money and the time there, spend your resources there, and then that'll make the next the next bump up a lot easier would be my two cents. >> Yeah, I would tend to agree with that. Um, only case being, you know, if there's a strategic VC that can help with distribution um in a big way. um you know tap into their user base. Um certainly pursue those opportunities, but organic growth to 5 million sounds like a a great plan to me. >> So I'm not thinking of the plan, I'm thinking of the cash. So part of it is do you have enough money, right, to get to that to get to that point and show that that kind of glide path. So part of it is the sometimes you have to raise money and you can't get the valuation you want. But if you have the internal resources, you know, you want to show as much growth as possible, you get a better valuation and you can, you know, maybe you can raise more money. >> I think we have time for one more. >> Hey guys. Uh so there's about 250 stable coins out there call it 300 billion of value. Um, Kelly had mentioned that there are still some interesting projects that are have very specific niche audiences, right? So, if you're creating a stable coin, what is it that's appealing as an investor? What's appealing about a stable coin founder who says, "Hey, I got a niche interest or a niche target market versus someone saying, "I'm going to be the 251st generic stable coin backed by treasuries." >> I I mean, I think it's just like what's the value there? Is anybody else serving that market? is anybody else serving that, you know, corridor of of payment infrastructure that's needed? And so I think and and what's the yield? And if they can't make it work because nobody's catering to them or servicing to them, but it's a large enough market, uh, if the TAM's good enough, then yeah. >> Yeah. I think it's if it's a new geography, um, for example, you know, Japanese yen stable coin or, you know, something like that or is it some sort of new product where, you know, it's a bitcoin stable coin? Uh I think there's a ton of potential in that. Being the like you said the 250th uh treasurybacked stable isn't exciting. Uh if it's fractional reserve banking that could be interesting but uh that's you know not really allowed in the US yet or or the EU. Um and it's really all about distribution like even if they have a niche product can they capture it? Um and and how do they get there? >> Yeah. How long can you hold on to the market too? If it's in a niche market um and you're first there and maybe you establish yourself, but maybe it's a lucrative market someone else jumps in too. So can you sustainability? >> I think we're out of time. Let's give a round of applause to our panelists. [Applause]