I’m excited to officially announce Hash3, a $29M seed-stage crypto fund investing $250k-1M into passionate founders building an open and permissionless future.
Hash3 Is Built for Founders:
I have spent nearly every waking moment over the last year building Hash3. While it may have been easier to join an established fund in 2022, I saw an opportunity to build a seed stage firm that pools the collective experience of successful operators to help increase the chances of founder success. Founders navigate through hundreds of abstract decisions daily.
How do I create a more cohesive product and engineering org?
How do I analyze my recruiting funnel?
How do I incentivize risk-taking while continuing to grow the core product?
Oftentimes, VCs are not the best equipped to answer these questions. It’s founders who have been in that position or operators actively testing strategies that can give the most effective and up-to-date advice on how to navigate problems.
Hash3 was conceived when I first met Surojit Chatterjee, the former Chief Product Officer of Coinbase, and subsequently Ramani Ramachandran, the Co-Founder and CEO of Router Protocol. We had the thesis that by bridging knowledge from seasoned operators to ambitious founders, we can help increase the chance of successful outcomes. Today, we have built an exceptional LP base to prove that hypothesis; 30% are execs or co-founders of businesses that have *exited* for $1B+ (in a number of cases $10B+). That 30% is responsible for generating over $3T of aggregate enterprise value (yes, trillion with a T). We want Hash3 to become a collective of like-minded individuals, spanning across the portfolio and LP base.
In order to provide more hands-on help to founders, we partnered with advisors who are incentivized to support the portfolio:
- Surojit Chatterjee (Former Chief Product Officer at Coinbase)
- Yuga Cohler (Senior Staff Engineer at Coinbase)
- Corey Miller (Growth and Product at dYdX)
- Gokul Rajaram (Exec at DoorDash; Board Member at Coinbase, Pinterest)
- Ramani Ramachandran (Founder of Router Protocol)
Remember, founders, these individuals are quite literally there for you. Think of them as an extension of your own mentor and advisor network. The list of advisors will expand as we identify gaps in what founders need.
We built Hash3 to be flexible. We can fund very early projects to test initial hypotheses or write bigger checks so that a team with a tested hypothesis can knock down the next milestone. We can also explore new types of funding structures and mechanisms. Regardless of check size and structure, we want to be a meaningful contributor to your company and each investment is a promise to support the founders going forward.
While the last 18 months have not been kind to crypto, missionary entrepreneurs continue to innovate and drive the space forward. Contrary to the narrative, the data shows both verified smart contracts and active addresses hit all-time-highs in May 2023. The density of talent and signal-to-noise ratio in the space are at all time highs. If you are an entrepreneur who has been contemplating building a crypto company, there is no better time than now. Your product, partners, and first hires will all be pressure tested - if they can withstand the current environment, they can withstand any environment.
Who Am I and Why Do I Care about Crypto:
I’m Hootie Rashidifard. Prior to Hash3, I spent five years at Canaan Partners, a $7B AUM early-stage fund, where I invested in crypto and fintech starting in 2017. I also launched and co-led the firm’s seed vehicle, Canaan Beta, which was one of the first dedicated seed vehicles within a larger fund. Prior to investing, I worked on the business operations team at LinkedIn (acquired by Microsoft) and in tech investment banking. I graduated cum laude with a B.A. in Mathematics and Economics from Northwestern University.
When thinking about where to focus my career, I looked inwardly at what has driven my decisions to date and the motivation goes back…like way back.
My parents are Iranian immigrants that came to the US in the mid ‘70s. Like many immigrants, they came to the US to get a college education, planning to return to their home country. When the Iranian Revolution took place in the late ‘70s, my parents had their bank accounts frozen. I can’t imagine the fear that they felt at that moment. While they reminisce on those experiences fondly, their trauma formed into a distrust of banks, which shaped my worldview for self sovereignty (for more detail see The Scariest Thing I’ve Ever Done Pt. 1).
When I first encountered Bitcoin in 2012, I recognized a solution to the problem that my parents had 35 years prior. My next thought was that maybe other people will also see the value in decentralized alternatives. You might be thinking – ok, sure, but that person isn’t me because I’m not from a country that will get sanctioned. Well, maybe, but even in the United States, which has one of the most robust and accessible financial infrastructures, there are still reasons why you might want to have a decentralized alternative.
- Deposit Risk: SVB, First Republic, 156 other regional banks, and major banks like Credit Suisse took your deposits and underwrote them into now underwater, long-dated mortgages, putting their equity, but, more importantly, your deposits, at risk
- Lending Inequality: High-income Black homeowners are more likely to get higher interest rates than low-income white homeowners
- Inflation Risk: Your USD has been devalued by 20% since 2020. In other countries this is even more exacerbated: in Argentina, inflation soars 100%+ y/y, corrupt governments siphon off money, and broad swaths of the population lack access to basic financial products
- Developer / Creator Censorship: Facebook, YouTube, Apple, Amazon, PayPal, Stripe, and other major tech companies have deplatformed individuals or businesses that go against their policies, have a product perceived as competitive, or represent political or religious principles that the platforms do not like
Sounds like while you may trust your centralized entity today, but you might not want to trust them over a multi-decade time horizon. If you wake up one day to being booted, well, you might be quite upset. You also might think it’s a good idea to have a credibly neutral alternative, which will undoubtedly be built through decentralization and user-owned networks.
What’s Next:
Hash3 is open for business and actively investing. There are ten companies in the current portfolio, including EigenLayer, Ajna Finance, and Crossmint. As you might notice, the largest focus area for the fund is infra/middleware. I believe that there is still much to be built at the infra/middleware layers, especially around scalability, security, privacy, oracle-free decentralization, ease-of-use, and ease-of-development. The solutions being built today at those layers will become the composable fabric for future utility-rich applications, which will catalyze new end user markets and bring self sovereignty to the mainstream.
Hash3’s investment framework is listed publicly. The investment criteria serves as a starting point for determining whether a prospective opportunity fits the fund’s underwriting model; it also serves as a blueprint for further diligence. When evaluating protocols, my philosophy is that decentralized protocols must maintain immutability, trust minimization, censorship resistance, robust economic policy, and utility to drive a sustainable business model. These are core principles that result in robust participant incentives.
I like to meet founders early and can lead, co-lead, or participate in fundraising rounds. If you’re a founder or want to be one, I would love to talk to you. Contact via email or DM on Twitter.
Thank you,
Hootie