{ "episodeId": "SLP192", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "alyse_killeen": { "name": "Alyse Killeen", "role": "guest", "tag": "ALYSE" } }, "segments": [ { "speaker": "stephan", "time": "00:09", "start": 8.53, "text": "Hi everyone, and welcome to the Stephan Livera podcast, episode one hundred and ninety-two. My guest today is Alyse Killeen. So those of you who are wondering, what is it like to invest in Bitcoin companies, and how do you learn about that process? What are some common errors that people might make, and how do you consider this question of Bitcoin return versus fiat return? These are all questions that we will explore today. But first, The message on behalf of the sponsors of the show. So firstly, Swan Bitcoin. Those of you who are in the US, Swan is absolutely the best place to get your auto stacking on. It's so simple, even a no-coiner could do it. One, autofund USD from your bank account. 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They streamline the process, they do the accounting and the reporting for you, as long as you're comfortable making the investment decisions, New Brighton Capital can guide you through that process. And don't forget, you still hold your own keys, it's just a separate entity with your self managed super fund. So they're offering consultations, go to newbrightoncapital. Capital dot com, use the code LIVERA for a credit off the monthly fees. Alright, so that's the sponsors for the show today. My guest today is Alyse Killeen. She is with Stillmark, and she is the, founder and, managing partner of Stillmark, and she's also a, an advisor and an investor in many well-known Bitcoin companies. She is sitting on the board of well-known Bitcoin companies such as Blockstream and Casa. I also had, first had the chance to meet her at Bitcoin twenty nineteen, where I was moderating a panel and all-- it's always a pleasure to chat, chat with Elise. So, Elise, welcome to the show." }, { "speaker": "alyse_killeen", "time": "03:08", "start": 187.94, "text": "Thank you for having me. I've been excited to have a chat with you when I can actually hear you. So Bitcoin, twenty twenty or twenty nineteen, it was difficult to hear you, and so now I'm happy that we can actually talk when we can hear one another." }, { "speaker": "stephan", "time": "03:22", "start": 202.05, "text": "Of course. And so for listeners who aren't familiar, what happened, with twenty nineteen? I mean, it was a great conference, don't get me wrong, There was a little bit of an echo, and so it, it was one of those weird scenarios where like, you know, the moderator would try and ask a question, and then the panelists wouldn't necessarily be able to hear the moderator or each other, but, at the same time, it was a fantastic experience still, nevertheless. But, Alyse, let's, let's start with you. So I, I wanted to start with a little bit around how you got into doing venture capital and, and investing into Bitcoin." }, { "speaker": "alyse_killeen", "time": "04:01", "start": 240.57, "text": "Sure. So I came into venture capital from the, the sciences actually. So I had been working in the study of immunology and research and pursuing a PhD, in, in health psychology, and specifically I was looking at how, How cognitive interventions could, could influence disease progressions, and I was looking at immune-based disease. So this was really exciting, very intellectually challenging, but it was a bit of a break for me in terms of my, value system. So I had grown up with two entrepreneurial grandfathers. I hadn't even gone to work, so I used to spend summers, and weekends with my grandparents going to work with one of my grandfathers and really coming to value entrepreneurship, and building. And he was doing, it was blue collar, so they were, my grandfather owned, plumbing and large scale sheet metal business in San Francisco, and so it was, you know, real work where you could see, the result of your work, and so I could see buildings going up, and it, it was, you know, to have something tangible was, exciting. And, in academia, it was, you know, it was, you were publishing work to have, you know, twenty or twenty five, Other people read it, to then base their own research off of your work, and so it felt there was a little bit, of an incongruity in terms of what I had grown up to value and then what I was doing in academia. And so I thought that I would go back to business school and to learn, to gain, a financial toolset. So I had, you know, the math and statistics background, but wanted to gain the financial background because I thought I'd be an entrepreneur. And so, In, in doing that and going to business school and building my network, I started to meet VCs to, you know, to prepare to raise money for a company myself. and one of those VCs said, \"You know, given your skill set in research and in math, why don't you think about the other side of the table?\" And so I did, and just kind of fell in love with it. So what started out as a commitment to do a ten-week internship just turned into a job and venture. And that- That VC firm was, had about a billion dollars in assets, under management across the lifecycle of multiple funds, and they were focused on, heavily on infrastructure tech. And so I came up in VC really looking at, technologies like cloud infrastructure and networking, data center software, cybersecurity. I spent a lot of time there, and so really like the harder technologies, and infrastructure. And so when in twenty-thirty 13, I came across Bitcoin. Really, I came across Bitcoin as an infrastructure, so as the Bitcoin blockchain, rather than, you know, as a currency that I was thinking about trading or, You know, anything other than just, it was really to me, it was just an infrastructure. And because of my background, I was able to do a, a deeper dive on diligence and also have, kind of richer conversations with the developers that were working in the space in twenty thirteen. And so it gave me a little bit, I think, of an unfair advantage to ramp up on Bitcoin, and then to also understand in twenty fourteen and twenty fifteen when the first ICOs, were launched, to understand what the difference was between a Bitcoin blockchain and the other blockchains that were being, introduced through ICOs. And so that's how I came into venture and also how I came into the Bitcoin space." }, { "speaker": "stephan", "time": "07:42", "start": 461.84, "text": "That's interesting as well, because, in the earlier days, there was a little bit more It was kind of like there was excitement about all these different things, because I'm kind of of a similar class. I'm, I'm class of 2013 as well, right? And in those days, I recall there was-- I think at the, at the-- in those days it was people were just kind of excited about all these different things, right? There was kind of digital gold aspect, there was payments aspect, and then people were talking about some of these other ideas like, okay, timestamping or whatever else. And I suppose you were- Thing, and I think a couple years later, the colored coins idea came as well. And so I think these are potentially, were those some of the blockchain applications that you were thinking of in those at the, at that time?" }, { "speaker": "alyse_killeen", "time": "08:24", "start": 504.34, "text": "Yeah. So I had conversations, you know, with all of those groups of folks, and, you know, I think coming in as an infrastructure investment investor to the space, I wasn't, committed to any one, you know, application or utility of the infrastructure. I wanted to really do a deep dive on, you know, the, the i-people's ideas broadly. And so I, I think that was, it really created, an advantage to the work I do today to be able to take A real serious look, at the propositions, that were, you know, that cropped up in twenty fourteen in the early days, and also to see the early process of ICOs, and of new blockchain launches. And so that, I think seeing that early and taking the perspective of, an infrastructure and deeper tech investor was helpful, in allowing me to really focus on where value is being built today versus, the distraction Of some of like the qu-quick flip stuff that's happening for folks optimizing for a really short term ROI." }, { "speaker": "stephan", "time": "09:31", "start": 571.33, "text": "Right, yeah. I think that's, really fascinating. And, so I guess- Because you were one of the earlier people in that space, what were, I guess, some of the-- Like, what are some of the pitfalls that people who are trying to invest in this space, what, what, what are some of the pitfalls that they tend to fall into?" }, { "speaker": "alyse_killeen", "time": "09:50", "start": 590.4, "text": "that's a good question. So, well, I mean, I think the, the pitfall that people, the, the trap that pe- that investors, venture capital investors, fall into is, frankly, just inadequate diligence on the infrastructure and maybe not asking the right questions, right? So, you know, I, yeah, I mean, I think, you know, I, I have to say that there's a lot of luck that went into this also for me. So, for instance, one of- The first set of entrepreneurs that I met, in twenty thirteen, in the Bitcoin space was, were the Blockstream folks. So in twenty thirteen or early twenty fourteen, Adam happened to be in Los Angeles, and so I was able to meet up, and talk to them about, that group, about infrastructure of Bitcoin blockchain generally, the technologies that converge to make Bitcoin possible, and then the- The higher layer infrastructure that could be built on top of it and the utility set that that would open up. And so in understanding that sort of, like layering of technologies, it allows me, I think, to better discern what's unique or not unique about a new blockchain that crops up, right? So is this new blockchain that's cropping up, something that's going to offer unique value or is this something that's going to be actually, very similar to what- What the Bitcoin blockchain itself can do once higher layer infrastructure, on that, on that blockchain, is secure. does that make sense?" }, { "speaker": "stephan", "time": "11:29", "start": 689.02, "text": "Right. Yeah, I think absolutely it does, and I think, that, that was perhaps a common, Misconception, if you will, because there would be times where, for example, someone might talk about, \"Oh, this thing does whatever transactions or whatever,\" but then the thing really you have to think about is, once you scale up to the same level of users that Bitcoin has, you're gonna run into the same problems. So you're gonna need some way to go beyond that, right?" }, { "speaker": "alyse_killeen", "time": "11:51", "start": 711.42, "text": "Right, that's exactly right, and I think some of also what we're seeing in the different offerings of various blockchains is just, a, a variation in what the core developer groups are optimizing So we know that the Bitcoin blockchain development is really centered around, security, dep-dep-dependability of the blockchain, and stability, and then we see the trade-offs of that, right? So the way that we progress, The updates to the network, for instance, is always going to be, the, the pace of which we progress is always going to be secondary to the maintenance of, the core promises of that network, right? And so, and that's, that's a trade-off. That means that things will move, will seem to move slower, and other blockchains that have pushed out, you know, greater utility sets quicker, they've done that, they've been able to do that because that's a priority versus the robustness of the network itself. And so, you know, we've seen A lot of, problems emerge when you're not, valuing security first. For instance, I remember, so, a, a little story about, you know, like VC, a day in the life of, of a VC. So sometimes, you know, you end up-- you always try not to, but sometimes you'll end up in a coffee shop surrounded by other VCs and, folks pitching those VCs, and it's, you know, like maybe my least favorite place to be, but somehow we, you know, often end up hanging out I was over, I was, unfortunately over, hearing someone's conversation, a few months ago, and it was someone, I guess, that had launched a blockchain through, an ICO, and they were saying, \"Oh, you know, like the sale went really well, but unfortunately, there was like some security hole, and so we lost access to, you know, forty million dollars of the funds that came in through the ICO.\" but, you know, there was no real impact because we still had the other twenty million that came in or whatever, and, It's like so wild to me that, you know, that people would be that, you know, laxadazical about security, about respect for the people, for funders' capital, and just thoughtfulness about the longevity of their company, or excuse me, the longevity of the technology that they're putting forward. And so, you know, the-- and that's why I'm focused in the Bitcoin space. So we're thinking a lot- lot at Stillmark about longevity, building businesses for the next several decades, and pushing culture forward broadly, in a way that also produces return for fund investors. And so it's quite different from seeking, you know, very quick returns, through-- by investing as a, as a VC with early access and then, you know, making the return by selling to a less sophisticated investor." }, { "speaker": "stephan", "time": "14:46", "start": 885.78, "text": "Actually, Alyse, can you tell us a little bit about Stillmark? Why did you found it? And also, b-b-because you play, you, you've got, you're sort of wearing multiple hats right now, right? Because you've got Stillmark, you also advise for Mantis. And at the same time, you're also, sitting on the boards. So could you tell us a little bit about your involvement across those?" }, { "speaker": "alyse_killeen", "time": "15:06", "start": 905.83, "text": "Sure. So I think of it all as one. So I only do things outside-- So I have two positions that are outside of Stillmark's portfolio, which is the advisory work, with Mantis and the board of director seat with, Blockstream. And I only-- And so those are, I, I expect those will be the only two positions I take, and I kind of had room to do two things, and those were the and the reason they were the two, there's, there's two reasons, and, you know, it's similar actually to how, to some of how I consider portfolio companies or companies that will come into the Stillmark, investment network. One is that we wanna be really working with like great people, and so I mean that not just in terms of like intellectual contribution or, capacity, but also people just of high moral standing and that are really, value aligned And so people who see their work as not just producing, you know, financial return, although that's quite important obviously, but also who are producing a cultural return and pushing culture forward and doing that by applying blockchain technology, or applications built on blockchain in a way that's very consistent with Bitcoin's original founding core principles. and then two, the, the teams like Blockstream or Mantis that I work with outside of, Still- Stonemark are, are companies or groups that really contribute to what Stonemark's doing. And so, for instance, of course, you know, Blockstream is building really a full stack of Bitcoin infrastructure, and so being able to be there at, at the forefront and in those conversations helps in the decision making diligence, and just even sourcing for Stonemark. And then Mantis is, you know, really attractive because they will have a focus and have already begun investing in the Bitcoin space, But what's different about Mantis from other VCs looking at this space is that, of course, it's co-founded by the Chainsmokers, and the Chainsmokers have just built such an engaged, you know, audience, and they've really done the work to like speak back and forth to their audience so that the music they're introducing and the way that they introduce it is a response to what the audience has asked for. And so, I guess what I'm saying is they've found a way to have their finger on the pulse of their audience. And we need to bring a bit of that sort of attention, and connection to the Bitcoin space, because of course we're all-- I'm thinking a lot about adoption and the breadth of adoption of Bitcoin and of applications that will drive adoption, and so having folks that think a lot and have been successful in their work, around bringing an audience into the decision making of their own business, helps our founders. And so Stillmark, for instance, co- Invested with Mantis and Kaza, and Mantis is able to be helpful to Kaza by allowing them to think through, you know, the breadth of the reach and, you know, what their con-- their broad consumer group, is asking for or what, you know, what we should anticipate the, the consumer group to be asking for in the future." }, { "speaker": "stephan", "time": "18:19", "start": 1099.19, "text": "Yeah. What's it like working with the chain smokers?" }, { "speaker": "alyse_killeen", "time": "18:23", "start": 1102.55, "text": "It's great. So I, you know, so I, yeah, I, I never, I like to go into, getting to know people without having much of an expectation either way, but I have to say, like, Alex and Drew have totally blown me away. So, they're just-- both of them are just really incredibly, humble and thoughtful people. And so I think, you know, that, that opens the door for them to really understand Bitcoin. So what I've noticed over the years- Is that folks that are, approach Bitcoin in a humble way, tend to grok the tech quicker, right? And so if we come in with an idea of what Bitcoin is supposed to be, or what a blockchain is supposed to be, we kind of start to push back against what it is, or we're afraid to ask, you know, dumb questions. and Drew and Alex are just incredibly humble, and so, you know, so in our, in one of our first, meetings, they came really set for that meeting with Just, you know, like a set of questions about what Bitcoin did, and then responses about how Bitcoin made sense for their own audience and why the folks that they were familiar with, would really resonate with the value proposition and functionality of Bitcoin. And so I've just been, I've been really impressed. And then their work with founders, is great. You know, like they're right there in the trenches, not just through an Alex, but also, Milan and Jeffrey, who are the other two GPS, they're right there with founders, like kind of digging and that's actually quite unique for VCs, so I, I like working with them at ten." }, { "speaker": "stephan", "time": "19:58", "start": 1197.52, "text": "Yeah, that's great. And, it seems to me that the focus, p-p-perhaps on their side is a little more at the retail level, where perhaps you're kind of, you're sort of working across infrastructure as well as, like retail individual level, right?" }, { "speaker": "alyse_killeen", "time": "20:10", "start": 1210.36, "text": "Yeah. Well, so everyone, so what Stillmark wants to do is similar to what Mantis wants to do, which is that we want to make sure that we're adding value," }, { "speaker": "alyse_killeen", "time": "20:22", "start": 1222.01, "text": "The opportunity for me is that, is the network of Stillmark, right? And so I've been in the space since twenty thirteen and have, you know, a great network of technical folks, and builders in the space, and that can be helpful to portfolio companies, or companies coming into Stillmark's portfolio through investment. Mantis seems to be thinking really similarly, so they know, it seems, that what they have to offer is, feedback on consumer, opportunities and consumer, products Basically, right? Because the chain smokers offer a product, and so they're, they're going to be selecting for companies, it seems to me, that they're able to offer value to beyond just the check, and Stillmark is trying to do the same." }, { "speaker": "stephan", "time": "21:07", "start": 1266.84, "text": "Yeah, and, I, I'm also interested to understand when you, when you're working with your, investors as well, it's also about what kind of time horizon are they looking at? Because if they're looking at, \"No, no, I want this kind of, it's a short-term kind of payoff,\" then that changes the way you're looking at, an-advising or investing in companies as well, versus those who are thinking at like a longer timescale. Can you comment a little on that?" }, { "speaker": "alyse_killeen", "time": "21:32", "start": 1291.56, "text": "Sure, but we're not" }, { "speaker": "alyse_killeen", "time": "21:36", "start": 1296.08, "text": "I've been really, no one ever asked that question, so I'm happy that you asked that. I've been really incredibly grateful for the, initial investor set that Stillmark has, and I think that we, You know, our, the original back-- so StillMark launched as a fund in twenty, nineteen. And prior to that, I had done investments through SPV vehicles, or special purpose vehicles, and had spent, time at accelerators or other firms where parts of what I did were, was Bitcoin, investing. And, you know, there were other parts too, like enterprise tech or consumer tech investing. And StillMark was launched, s- in twenty nineteen so that I could focus entirely- Entirely on investments in the Bitcoin ecosystem. And in order to do that, you know, in the right way, I think your initial investor set is quite important. And I was just, you know, really, fortunate that I think some of the sharpest folks in the Bitcoin space, were looking for a fund like this. And so Stillmark's initial, founding, capital in terms of what supports the fund, or the dollars deployed from the fund Are the folks really that I think understand, Bitcoin just the best. And so that was, you know, important to me in launching Stillmark was to make sure that the investment theses that the fund was based on were supported by the folks that knew the tech even, you know, better than myself, frankly, sometimes much better than myself, and to be able to run my ideas past them, the investment hypotheses past them, the way that sectors of investment were defined, and, and just, you know- You know, really simple mechanisms of portfolio building, such as, you know, what sort of, when in the, when in the life cycle of Bitcoin do we wanna invest in this sort of company versus that? this investor group, the initial investor group of Stillmark, consists of people that are really able to, you know, offer an informed opinion on all of that or an insight on that, and so with that Stillmark launched in twenty nineteen." }, { "speaker": "stephan", "time": "23:49", "start": 1429.15, "text": "Right, and I think that's a really-" }, { "speaker": "alyse_killeen", "time": "23:51", "start": 1430.9, "text": "Hey, sorry to interrupt you. Nobody's looking for a quick return, right? So venture capital isn't a quick return generally. So, e-funds, tend to have venture capital so different from token investing or hedge funds. Venture capital funds have a ten-year life cycle generally, in my experience in the venture capital field, funds will run, you know, sometimes even longer than that. So it's, you know, ten to twelve years is normal, and then, the return on capital starts happening. I mean, around your, you know, between year five and seven. And so it's really not like a-- it's not generally a qu-- it's very different from hedge funds, it's not a quick flip. And so, for Stillmark, we were only, we're only working with accredited investors, and, you know, it's quite important that the investors understand, what to expect from venture and that it's, you know, much different from, say, ICO investing, although, like I said, the investor set here is, with us To someone that was interested in ICL investing." }, { "speaker": "stephan", "time": "24:54", "start": 1494.16, "text": "Right, of course. And I, I think this is also an interesting question because for many of us who are, we, we're fundamentally bullish on Bitcoin, and so then the question is, well if I invest in this, am I gonna, like, a-how am I gonna denominate my returns? Am I gonna consider them in fiat terms, in Bitcoin terms, and how, how, how do I, tease those apart, You know, if, if I want to invest in this space, but I know it might not necessarily return the same that Bitcoin would." }, { "speaker": "alyse_killeen", "time": "25:25", "start": 1525.21, "text": "Right. So I think the best way to participate in a Bitcoin venture fund is to hold Bitcoin and to participate in a fund. and so, and I, I think that, you know, it's hard, I, I don't, I don't like to ever think about predicting the price of Bitcoin. and I also think in addition to, it being difficult to predict The future price of Bitcoin, I also think it's difficult to predict the drivers of the price, and we've seen even this year that, you know, folks have been wrong in what they presumed would drive Bitcoin price or at least how quickly it would drive it. And so, I try not to do that. But that said, I think that one of the things that can, support the price, the intrinsic value of Bitcoin is the development of a robust ecosystem, on top of the- Bitcoin blockchain infrastructure and on top of Lightning and on top of Liquid Network, for instance. and so once that sort of economy starts to pick up and there's greater utility of Bitcoin, so right now we know that most people that, have Bitcoin have it to hold and trade, and when there's more, when, for instance, we see people earning Bitcoin and using Bitcoin to be able to be part of a decentralized global workforce, or to do things Things like, pay for their phone minutes, or, or, or buy their phone, start to create sort of a circular economy. I think that supports, a, you know, a greater value, an argument for greater value of Bitcoin. And so if we're, someone with a position in Bitcoin in their portfolio, it makes sense for that person to also be investing and backing the companies building, the economies built around Bitcoin also. And of course, so Stillmark invests in, infrastructure. So for instance- One of our early portfolio companies is Lightning Labs, so we do invest, you know, directly in, you know, infrastructure, higher layer infrastructure being built on the Bitcoin blockchain, but we're also investing in companies that are contributing to the economies created around it, and I hope and expect that if we do that right, that that, adds to the value of Bitcoin. And so there's, I think, you know, A, a way that Bitcoin, obviously contributes to, to, Bitcoin companies, but Bitcoin companies contribute back as well. And that's, that's the kind of company we wanna work with." }, { "speaker": "stephan", "time": "27:56", "start": 1675.83, "text": "Yeah, I think that's a great answer. I think, it is always a difficult question, but at the same time, if you are fundamentally bullish on Bitcoin and you have a certain view on how you want things to be built out, then this is an opportunity to invest into the companies that are building that particular vision, whether it's, let's say, Bitrefill, and you wanna be able to buy, you know, phone vouchers, or whether it's Lightning Labs, and you wanna be able to, you know, obviously be part of the Lightning Network. I think that's In this space, I have to sort of think about as well, because as they're holding bitcoins and the, you know, those bitcoins are rising in value, then they wanna start thinking about, well, how do I, how do I wanna invest in this space if there's certain things that I would like to see? You know, if the, if so, if something doesn't exist and you wanna see it, well, you're gonna have to, someone's gonna have to put in some work to make it happen." }, { "speaker": "alyse_killeen", "time": "28:44", "start": 1724.08, "text": "Yeah, that's exactly right. And, you know, I think that CEO, capital to launch venture funds dedicated to Bitcoin, right? Like other projects have. We don't have a marketing budget, all of that, and so to have venture presence and, still market dedicated venture presence to Bitcoin companies, you know, I hope to see that continue to flourish over the next few years. So I, I hope to see more, venture funds, you know, kind of doing, having the same sort of attention to Bitcoin." }, { "speaker": "stephan", "time": "29:24", "start": 1763.98, "text": "I think Also related is over the years, I've seen, you know, a lot of businesses come and go. It's been difficult to monetize for some businesses, right? So that some of them have had a thesis that maybe didn't play out or perhaps they were a little early. so I think that, that's been, perhaps a challenge in the space because Bitcoin is one of those things where maybe in the earlier days it was thought, oh, there'd be lots and lots of transactional demand for things where maybe the value, maybe arguably, it's, right now there's a lot Hodling, so then things like, you know, wallet services or something like Kasa makes a lot of sense. How, how, how, have you seen any, yeah, difficulties in companies monetizing, and, you know, become hitting that certain profitability required?" }, { "speaker": "alyse_killeen", "time": "30:12", "start": 1811.79, "text": "Yes, of course. So I think there's two, issues that you, that you bring up. So one, I think it's really important to be investing in a company when the infrastructure itself, so both the, both the hard infrastructure and then the sort of like network of other companies, around it, so like the soft infrastructure of that allow for that company you're investing in to thrive. So for, and, and you know, when that, when that's not the case, then we have problems. Like the Segwit two x, debacle, right? So, o-my opinion was that Segwit two x happened, you know, almost entirely because VCs had, you know, kind of like misunderstood what the infrastructure was ready to do and invested in companies based on, metrics that they had projected, so metrics they had assumed would be possible in twelve months, twenty-four months, thirty-six months, they had presumed it would be, possible for the company to achieve without ever digging in to see if Infrastructure would support that. So did the infrastructure, you know, allow for this many transactions or, you know, this sort of reach? And when they discovered that the infrastructure didn't allow for that currently, then they wanted to, you know, change the infrastructure, right? and so then we get Segwit2x, which was quite unfortunate because, you know, companies had to build-- were forced to spend resources to build, you know, for this potential, You know, like technology challenge, so, you know, I mean, what I would like-- so this is the, this is the challenge of diligence, right? So the right thing to do is to make sure that when a company comes to you, and this is what we do at Stormark, when a company comes to you with a, a, a value proposition and a product roadmap and then a set of projected metrics, you're not just validating that that's something that the company can achieve given the talent on the team, Or, you know, past performance of the founders or the rest of our, the tech team, but you're also validating that that's something that current infrastructure allows for the company to do. and so that's, you know, I mean, that's something that happens at Stillmark really, following the first meeting with a founder. And so we're always thinking about how our companies relate back to the core infrastructure itself, so, you know, trying to avoid those sorts of, those sorts of problems of companies not being able- able to monetize or achieve their projected metrics. the other thing though that I think that's a challenge is that the community, the Bitcoin community, tends to like really, but some folks tend to really push back against companies monetizing, which is, you know, I, I don't know, I guess there's like a pure, the purity test of the Bitcoin community, like the breadth of what people have to achieve to be, you know, a real like Bitcoin company or a real Bitcoin, real Bitcoiner is just like wild to me now, you know, like it, it's way more, stringent and just, you know, i-impossible to achieve relative to the standards we had in twenty thirteen or twenty fourteen, I think. but, you know, I think that founders have to be comfortable with Monetizing, and also, you know, I always try to acknowledge to entrepreneurs in the space that really monetizing just protects the value proposition that you're putting out. And so it shouldn't be, you know, we shouldn't-- People may push back against it, but there's no-- I, I don't think that it's valid, and so if we wanna support our work, if we wanna support our tech, and if we wanna continue to serve consumers, or Bitcoiners in the way that we, envision, we need- To be able to capitalize our business, and ideally you don't want to base, your, your business on, you know, multiple, you know, endless, venture capital rounds, right? We want to build our business based on, you know, taking venture capital if it's appropriate, and then monetizing, capturing some of the value we create for our u-users through monetization." }, { "speaker": "stephan", "time": "34:22", "start": 2061.79, "text": "Yeah, I think there's, you raised some really good points there, and I think, I guess the first point is around, you know, the infrastructure, what level do we have? Are we being realistic about, the infrastructure and other, you know, the founders of these different companies and so on, and their investors also being realistic about that? And then I think the other part is just, yeah, there is certainly- The, the Bitcoin, like if you look, and again, Bitcoin Twitter isn't Bitcoin, right? There are other, there are many people who might, for example, use Bitcoin services or hold Bitcoin without necessarily being a Bitcoin Twitter kind of hardcore person, but, I, I definitely sense that, that can make it difficult to monetize, and that can make it difficult for the sort of longer term viability of some of the businesses that are in the Bitcoin space that people rely on, or maybe they use some of the software that this business is making, that open source software. And so, you know, you've gotta, try to support those businesses, where, where reasonable, I think. but I, I wanna touch on the infrastructure thing. So, in- In those moments, there's often a lot of confusion. There's a lot of arguments flying either way. There are some people saying, \"Yeah, we can scale on chain,\" and then there are other people saying, \"No, hold on, that's, that's gonna, disrupt the value proposition of Bitcoin.\" What was your process in sort of sorting out the facts from fiction? How do you sort of stay up to date on, infrastructure and what's gonna be a useful thing for Bitcoin?" }, { "speaker": "alyse_killeen", "time": "35:53", "start": 2152.91, "text": "Yeah, so far and away the most important thing, and I, I say this Every venture capital panel that I do, because I'm hoping people, you know, VCs in the space will do the same. far and away the most important thing I think is reading and understanding the early discussions, in the cypherpunk group, when Satoshi was just exploring, you know, what Bitcoin was and what it meant and when that group was engaging with him and, or him or her or the group of them, and pushing back against what was, you know, what was being created and what was assumed was possible from Bitcoin. And so I, so in 2013, when I, decided to like really dig into Bitcoin, I went through, you know, all of those posts and readings. And so there was things that were, said there that I, you know, that I still use today in my work and that have helped me historically avoid some, places where other folks have like kind of fallen down. So for instance, we always knew that second layer infrastructure was going to be necessary to re- Reach any sort of scale in terms of transactions. And, you know, I mean, we-- so if you had read and read the arguments and the dialogue back and forth between, this group, Satoshi, you know, you could have avoided, you know, a myriad of mistakes that were made around twenty fifteen, twenty sixteen, twenty seventeen, and so, you know, far and away, that's the most important component of the work that I do now. But then extending upon- That there's two other things that I do to make sure that, you know, Stillmark is really investing, like at the precipice of what's possible, while being really anchored in just the truce of the tech and of the, of Bitcoin's roadmap. And so the first is that, just staying up to date on, current writing, so things that are public, and, you know, so for instance, just, you know, the, the Bitcoin mailing list or I mean, even actually Bitcoin Twitter, so when, f-for instance, Peter Walle's Twitter account, I think, is really rich in, you know, offering, a look forward, right? So like a twenty-four, thirty-six month look forward, about what Bitcoin will be and will offer. and then of course, there's a network effect to what, there's an effect of the network that exists around, Stellmark to allow us opportunities for proprietary style insight on what's being created at the infrastructure level that will enable application companies and infrastructure companies, to advance themselves in the going forward. And so, you know, this is how venture capital works like this outside of Bitcoin too, right? So if you are- you know, in Andrew's and Horowitz, for instance, and you invested in Lyft or Uber, and you start to understand transportation flows, you know, domestically across cities or even internationally, you can place a more informed bet on a scooter company, for instance. and so Stolmark does the same in the Bitcoin space, right? So you know, like, like you said, I'm on the board of directors of Blockstream, that of course feeds in to how Stolmark understands Bitcoin development, we've invested in Kaza and Lightning Labs and, other companies that aren't disclosed yet, and all of that feeds into, you know, hopefully a very comprehensive understanding of where Bitcoin's going from a consumer perspective, right? On the Kaza side, understanding what consumers want, hodlers want specifically, and, well, and folks outside of the hodler community too, and then understanding also- What's happening at the second layer Lightning network, space, right? By, by having insight on C-Lightning or insight on, LND. So this should all, if, if I'm doing things right and spending, you know, the resource of time properly so that I'm dividing that between companies and also public dialogue of, Bitcoin from developers, then, you know, hopefully we have a comprehensive view that allows us to be investing, for the next four or five years Bitcoin versus where Bitcoin is today, or versus where we like hope and have our fingers crossed to where Bitcoin's going. We don't wanna do that at all, you know? And I think that's what, you know, a lot of investors did that in twenty thirteen or twenty fourteen, which is why people were so heavily backing, for instance, transaction companies, right? People were kind of investing with like a fingers crossed approach, and just, you know, that's not, that's not how it was raised in venture capital to do that, and not the practice of stonework. So we in, you know, what's, what will happen in the foreseeable future of the four to five years, while also, you know, being able to take like the moonshots too, but when you, when you take a moonshot, you still want it to be grounded in the truth of the tech." }, { "speaker": "stephan", "time": "41:06", "start": 2466.22, "text": "yeah, yeah, that's fantastic, and I think it's, it definitely, a very fast-paced moving, it's a fast pace in this, in this whole Bitcoin world, and you, you have to sort of maintain, keep an eye on the mailing list and Bitcoin Twitter and so on. And you mentioned, Peter Walle, and, even another ex-good example might be, this was a couple months ago now, but John Newbery had a great tweet thread, which I'm sure you saw, which was basically spelling" }, { "speaker": "stephan", "time": "41:36", "start": 2495.56, "text": "Longer term, let's say. Yeah. Yeah. and also I've seen, I, I was, quite impressed, you had a, appearance, I think this is at the start of last year, so this is probably like early twenty nineteen, I think you did a Bloomberg, appearance, and, you, you had a really great, way of articulating, because in these moments, you're on TV, you've only got, you know, thirty seconds to make a point or maybe even less, and to be able to succinctly pull" }, { "speaker": "stephan", "time": "42:06", "start": 2525.58, "text": "Coming and blah, blah, blah, like I thought you did quite a good job with that also." }, { "speaker": "alyse_killeen", "time": "42:10", "start": 2530.29, "text": "Yeah, I really appreciate Joe, I have to say, for what did you miss, on Bloomberg because, you know, I think that it's, like I said earlier, Bitcoin doesn't have a marketing budget, and, you know, I, you know, I'm less interested-- my portfolio companies don't need me to market them, right? If we're investing properly, they're doing the work on their own, but Bitcoin, and I think even More than Bitcoin, but the value proposition of Bitcoin and then the future of Bitcoin, need, you know, more of a platform, and for Joe to be willing to offer that to, you know, the Bitcoin community is really exciting. And so, if I, when I get a chance to be with them for, what did you miss? I'd like to make sure that I'm mentioning, a couple of like the new, you know, like insider known things that are coming out in Bitcoin That, you know, interested members of his audience that aren't Bitcoiners, right? and that, you know, only like think about Bitcoin or know about it in their periphery, that they have a couple of things that they can search for or Google to get an idea of what Bitcoin offers in the future, because frankly, it's-- so you and I were lucky to come into the space in twenty thirteen, right? So you could search for, Bitcoin on YouTube, or on Twitter, and you were gonna find Andreas Antonopoulos videos or Adam Back describing fungibility or something that really had value. And now if you go on to YouTube or Twitter, like, that's just not what you're-- you're gonna have to really dig to find those videos, and they don't, actively in any way distinguish themselves from like You know, all the, like scammer videos, right? And so, I just, y-you, I wanna make sure that when I have the chance to be in front of a non Bitcoin audience, that we're kind of like giving them little pieces that they can then search for that will help them like filter through the noise and find some signal on Bitcoin." }, { "speaker": "stephan", "time": "44:11", "start": 2651.37, "text": "That's fantastic. And I, I think another interesting related topic is around kind of the values of Bitcoin, right? And we were touching on this a little bit, Bitcoin Twitter and people who talk about, you know, cypherpunk values and so on. How much of that does that factor into, you know, thinking about whether a certain company or a certain product or a certain service would make sense, right? Because it sort of has to pass that sniff test of the, the community, as it were, or is it more like, well, you know, sometimes you can just build a product and Necessarily need like that community, it just needs the users to kind of take it on." }, { "speaker": "alyse_killeen", "time": "44:46", "start": 2686.16, "text": "Yeah, you know, I mean, I'm not, I don't even know anymore really what it means like Bitcoin community. Like, I think it started to just mean people who are loudest on Twitter. and that's, you know, just like not in-- not interesting to me like remotely, but, you know, honestly, I do care what my own Bitcoin community thinks, about our investments, and that's because, you know, I trust my- Network, and I know what they know, and, and, you know, I have people in my network that have been working towards the opportunity of Bitcoin for their whole careers, right? so meaning before Bitcoin, they were doing work that would lead to decentralization or, individual sovereignty and privacy and things like this. And so I definitely care what my community thinks, The values, the, the core values of Bitcoin, the founding values, are, you know, probably the most important thing when we're, when I'm looking at a company in evaluation for investment. And so really what Snowmark is doing is just backing founders who their vision, their product, their plans are consistent with the Bitcoin's value proposition. And, And, you know, i-if they are to succeed, it pushes Bitcoin forward and it pushes culture forward in a positive way. And so what I mean by that is, You know, a company like, well, so, let me use Lightning Labs because I've mentioned Kaza before, but, you know, Lightning Labs, should Lightning Labs succeed, it means that we have a more efficient way to utilize Bitcoin blockchain resources, right? We're able to ha- see different sorts of utility on the Bitcoin blockchain, on the, the Lightning Network, that weren't possible without, efficient use of the Bitcoin blockchain. so for instance, a company that I've mentioned before on other panels, most recently on at Kraken's Havening, party is a company called Stackwork, and Stackwork relies on Lightning Network to be able to pay, a distributed workforce, in real time for doing really simple tasks like photo tagging. and, you know, that can't happen on the Bitcoin blockchain without Lightning Network, and so, that's why a company like, Lightning Network really makes sense, and, you know, we're really grateful investors there. And so- yeah, so the value-- we, I, I don't think that we're aiming not to do any investments that are inconsistent with Bitcoin's value proposition, and it's really the first thing we look at. So even before talking to a founder, I'm already thinking about how what they're doing is consistent or inconsistent, with Bitcoin's core principles. And for me, the most important part, the reason why I came into the Bitcoin space, I think, is different from, you know, probably why you came in maybe or why other folks did. But But what I saw in Bitcoin blockchain was an infra- a really beautiful infrastructure, beautifully constructed, you know, an incredible incentive system that made it possible for us, for the first time, to have a public ledger that was truthful, right? and so th- through that, I knew that people would be able to broadly have access to shared financial tools and even access, right? So it didn't matter that, you know- We were people in developed markets with privilege, but we could have access to that in the same way that someone from, you know, a, a, a emerging economy in Latin America, for instance, could have access to that technology. And so, that to me, like the democracy of access to the financial tools and the lack of judgment in who you are and accessing that, so, you know, just the, the ability to opt in, was, you know, what was most compelling. And so- So when I look at companies today, some of the companies that are most exciting, are those that kind of, you know, allow for that, opportunity in Bitcoin to be actuated." }, { "speaker": "stephan", "time": "48:54", "start": 2933.5, "text": "That's fantastic. Yeah, and, I think it's, you know, people don't necessarily all come to Bitcoin for the same reason, but I think, certainly as long as, people are, are building out products and services and, you know, building out in the, in, in, in the way that, kind of grows, grows Bitcoin and grows the base, then I think, then people are aligned, right? yes. And I'm, I'm also curious to ask a little bit about how you-- I mean I see a lot of people coming to you trying to pitch. What are some ways that you would sort of, s-- you know, sort the wheat from the chaff? How do you sort of figure out what's gonna be a good, investment? is it part of-- again, I guess you, you gotta take on your knowledge of the space. What are some of the things that go into your mind, on make-- when you're making those decisions?" }, { "speaker": "alyse_killeen", "time": "49:43", "start": 2983.2, "text": "Yeah. So first, I wanna say I'm always like really, so at the beginning of our talk," }, { "speaker": "alyse_killeen", "time": "49:53", "start": 2992.88, "text": "So I think that, I hope that I still, maintain some like acknowledgement and understanding of how, like, you know, precious and precarious the entrepreneurial journey is. And so whenever someone, comes to me with what they're building, I, it's, I really feel it as a privilege, and so I'm always really grateful when, people reach out. And then also, I never-- So we reach out too. So Stillmark will, have an idea of what We want to invest in, and then we'll find, you know, what we consider to be the most exceptional founders building in that space. And so really what I'm looking for is, like I said, founders that have a plan or a product that's consistent with Bitcoin's core principles, that, a-a-and, they're comfortable with capturing some of the value that they create. So what I mean by that is that they're comfortable to monetize what they're building. and that's because, like I said, we don't want folks that are eternally dependent on Or, you know, like the goodwill of community donations. And, and there's lots of like really exceptional product that can be built, based on community donations, but of course, the responsibility of a venture fund, is to produce returns for our fund investors. And so there needs to be a more consistent, capitalization plan, than community goodwill. So we're looking for that. what I'm really looking for are people, are, are groundbreakers, right? So we want- I want to see, you know, this space is new, there's a ton of opportunity in the Bitcoin space, and so we want to see people doing things like something new, right? So, I like to see folks that are either generally like the first to market with an idea. And, and then there's just a ton of stuff that goes into the evaluation. So, and, and there's always exceptions, so I like even hesitate to say anything, but I'll, I'll give one example, because I can mention an exception to that. So one thing that I like to see, so first I'll say Stillmark invest at pre-seed, seed, and Series A stage, so that's really broad. we can be-- my investment ex-experience historically is all the way from first check into a company to last check in. Prior to IPO. And so, but Stillmark specifically is focused on anywhere from first check-in to Series A investing. but within that group, ideally, we wanna see some redundancy on the leadership team and some, and like reduction of key man risk. So what that means is, is this company dependent on just the existence of like one person, right? And if that one person, you know, decides that they don't wanna be engaged with that company anymore, does the company continue to go forward? So you want to see resiliency in the company. and, you know, that doesn't sometimes in companies that are really early stage, that's just not gonna be there. So that one person is going to be totally critical and not replaceable. And so there will be an exception, and I think in fact this year in twenty twenty, you know, that I think we'll probably be investing in a company that is an exception to that rule. But generally, we want to see that, you know, the company itself is stable. Outside of, you know, any particular one person. and then, you know, one thing that is like incredibly important to me, that I, you know, I think, you know, we've, we-- this we haven't made an exception for yet, and I don't plan to, is that the company founders or leadership, i-is able to engage in like a respectful and collaborative dialogue with the, with- Bitcoin core developers, so that doesn't have to be like formal, like, you know, we're buddies. It could be really as simple as like reading Bitcoin optech, right? John Newbery's work, and his team's work, or, the Bitcoin mailing list, or engaging with folks on Twitter and asking questions. But we wanna see that the leaders we work with are able to, engage with the folks building the infrastructure in a way that, our team leads can understand understand where Bitcoin's going and also sort of offer their own response to that so that not, not to influence development in any way, but just so that there's transparency about how what's coming, for Bitcoin impacts, you know, the private company side and the economy being built there. And so we just, we, you know, there's a lot of, You, that can even be contentious dialogue, but we wanna see people rise beyond, you know, contentious dialogue and also be able to be collaborative and thoughtful, because when you're building in the Bitcoin space, you know, the, sometimes the majority of your technical team exists outside of your domain, right? Outside of your control, because you're building on an open source, infrastructure. you know, so we're investing in companies building on Bitcoin blockchain as well as, Lightning Network, and so you're relying on These developers, you know, that you have no control over and that you shouldn't desire, of course, to have any control over, but we wanna see that there can at least be some sort of relationship and connection and respect that exists there." }, { "speaker": "stephan", "time": "55:12", "start": 3311.6, "text": "Yeah, that's fantastic. I think to some extent it's like, you know, it's like reading the room, right? Like don't just kind of bust into the space and think you're just gonna like change it up. And I think that, parallel exists as well with like, even if somebody's learning to be a contributor, they might first spend some time lurking and just kind of assessing and reading and trying to learn the culture a little bit before then they try to contribute or make some, you know, suggestion." }, { "speaker": "alyse_killeen", "time": "55:36", "start": 3335.73, "text": "Totally. Yeah, that's a, that's a per-" }, { "speaker": "stephan", "time": "55:41", "start": 3341.23, "text": "so I guess, in terms of, if anyone is listening and let's say they have a Bitcoin, they're, they're running a Bitcoin business, what are some of the ways that they should, you know, get in touch with you?" }, { "speaker": "alyse_killeen", "time": "55:53", "start": 3352.7, "text": "Sure. So I, well, there's-- Well, so first I wanna say that when we talk to founders, everything is confidential, even including the conversation. So I think that's actually, you know, a lot of folks have been burned by VCs, and I really hate that behavior that sometimes happens in the ecosystem. So, we don't, we don't even share who we talk to, we don't share decks, we don't share any data. When we talk-- When I talk to a founder, I presume that all of the data exchanged in that conversation Whether it's an email or an actual conversation, is owned by the founder. So founders can reach out, you know, whatever way they're most comfortable with. So you can reach out on Twitter, you can reach out via email, the still, I, Stillmark, just has like a splash page, but that splash page has an email link to it, and so people can reach out that, that way as well. and sometimes people also like to be introduced by like their friends that are already in the network, and that works too. So there's no The, you know, right way to reach out and, I, well, I guess the right way to reach out is just to know that sometimes the response isn't, you know, a twenty-four hour response, though I would like it to be. but what I like is that if you don't, if someone reaches out and then they don't hear back, you know, within that week, then to reach out again. So I, you know, sometimes we, we never intentionally don't respond to somebody, and I think we normally are always responsive, but sometimes things slip So the right way to reach out is just to, you know, to, to know that we're, like hustling to get back to people just as quickly as we can, and that if we don't, that, you know, a, a follow-up would be really appreciated. I don't wanna put that burden on founders, but I just wanna make sure that folks know that, you know, they can reach out again if they don't hear the first time." }, { "speaker": "stephan", "time": "57:44", "start": 3463.78, "text": "Of course. alright, so look, I think that's, it from me. but, if people would like to just follow you online just generally, just let the listeners know, where can they find you?" }, { "speaker": "alyse_killeen", "time": "57:54", "start": 3474.2, "text": "Sure. So I'm on Twitter, occasionally at, just, my first and last name, so at Alyse Killeen. And I think that's it. I, every, every, quarter I'm making a new resolution to be more active on Twitter, so maybe that will happen now with Q" }, { "speaker": "stephan", "time": "58:13", "start": 3493.46, "text": "Enjoy chatting with you. Thanks for joining me." }, { "speaker": "alyse_killeen", "time": "58:16", "start": 3495.5, "text": "Thank you for having me." }, { "speaker": "stephan", "time": "58:17", "start": 3496.82, "text": "And listeners, you can find me online at stephanalivera dot com. Thanks very much for tuning in and make sure you share the episode if you enjoyed it. We'll see you guys in the citadels." } ] }