Fabio Pezzoti on venture investing trends at Iconium

0:01i'm ashton addison from block west capital for investmentpitch media in the crypto coin show and today on blockchain interviews we have fabio pazzotti ceo of iconium fabio welcome to the show and thank you for taking the time to come on today hi ashton thank you for having me it's a great it's a pleasure actually to to to meet and uh and to start a chat with you yeah

0:25likewise i'm looking forward to hearing about iconium where you guys are investing in space what you see as the most potential growth areas of blockchain and cryptocurrency moving forward so with that let's kick off our discussion i would love to start by hearing a little bit about yourself with iconium you know what is the focus of of the venture and in cryptocurrency

0:46and then we'll dive into the details all right sure uh we actually launched economy in 2018 not too not too late but not too early and in any case in a in a bear market but which was good because in any case i think we got it like uh interesting projects when nobody wanted to invest in at that time uh we have uh we have

1:13we have been basically what i've done in 2016 and 2017 i started investing in cryptocurrency and digital assets and then i decided in 2017 to to build a team and to start working uh professionally on this uh on on this business and um believe it or not it worked out of italy which is uh it's not easy but it's uh yeah we actually we actually have a team

1:40of seven people now we have been invested in 80 projects in the pa since 2018 when we started investing and we now have 35 projects in in our portfolio uh we i have to say i mean i can i can take like uh the uh the the idea of uh like the all old school but it's not so old but basically

2:07i was born digitally speaking or technically speaking technology speaking in uh in internet and uh i started my first internet company in 1997 and i was really part of like this thing that most of the people have have uh i've forgotten but is very very close to what is happening now to blockchain everything goes fast everything is uh

2:36incredibly unknown investors are looking for new uh new things but also they're trying to group together to to figure out what is the new the new trend and thing and uh i i personally know that a lot of things will will not last but there are there will be some things that will be the next amazon and uh and uh google and facebook and everything so i i think i think i have a

3:05some experience about that and i think the the blockchain is really the the great thing that uh that is going to change the world and change also as we know it right now yeah great intro fabio and you're right i always see the uh the analogy from the dot-com days and talk about how yeah you know some of these companies in blockchain

3:32will very likely be the next amazon and google but there will also be many that probably we will not hear about in in the near future as well you know there's a lot going on even just since 2018 since you started in iconium you know the metaverse d5 nfts have really all grown from nothing since then you know back then it was mainly there's a lot of daps and and

3:58protocols that that we still see today but so much has happened since then so let's talk about you know in the last couple years uh with iconium there's so many different areas of blockchain to be focusing on where is your team specifically focusing the investments on in this industry yeah that's interesting i i don't want to say they were opportunistic but i

4:20think we follow the trends in a way or try to anticipate the trends sometimes we've been able to anticipate the trends sometimes we have followed the trends and uh and i think there are huge opportunities today in uh in like i would say like the the phase one of blockchain is over there is there is going to be a phase two phase two is like uh to me it's like

4:46more we are going to go we're going to live in a in a multi-chain environment we're going to live in uh in in in an environment where where you have uh defy that is not defy as we know it today i think defy today has been a great experience but it's going to change needs to take to change if you think about like uh decentralizing exchanges if you think about

5:14uh device defy as a role has been like a big a big experiment but in a way it's still like the dot-com era is like marketing money going there but it's there are still no profit profitable and defensible models so i think i think the next phase would be fantastic and one of the things that i i

5:42i love to think about i actually my life was actually like i did two dot-coms companies and i sold them in three years with great returns i don't want to do that anymore i just want to do like do it longer because i think that at the end the the if you look at 10 years span there is a great opportunity for uh for creating things that are much bigger

6:11than that i mean jeff bezos uh teaches us about how how long he resisted in uh taking losses and i think this is going to be like this and on top of it this is going to be a finance it's going to be governments it's going to be politics is going to be everything is is involved with uh with with our social life and economic life so i think uh

6:41i mean i couldn't be more optimistic about uh about what is going to happen in the future definitely and great uh backstory there fabio and touching on profitability of defy companies it's not something that you hear so often you know um of course at early stages a lot of those profits are reinvested uh into the company to continue growth but speaking of profits i'd like to hear

7:09your investment criteria for iconium you know what are the things that you're looking for in these blockchain startups when you're investing into them yeah well it's easy to say as we invest and see the state age starts in general it's easy to say team team team people because this is like the the the scarce scarce resource all over the places but i would say that

7:37you have to you have you have to think and then to to believe that these companies and these projects can really change the world and that's what we're looking for i mean for uh for it's uh it's just a something that is for for us is uh uh incredibly challenging in a way but it's not like we're not looking for returns that are like in six months i can give an example like we invested in

8:05a super bear market in terra luna we believed in the team we love the team i mean now it's easy to say but we believe in the team the the price of the token went under the price we paid in private sale to get a rebinance and wobby we bought more because we believed in the theme i mean the project was interesting that there was a broader fit but we we

8:29believe that first of all in the team and the the the the the capability of of keeping on with the uh with the market and i think that that's probably one of the best successes we had but we had we have other things but at the end even if like we go from technology software internet block blockchain the team and the people that are

8:58surviving the difficulties are really a key for every project and uh and we like it i mean obviously product fit is very important what we we enjoy very much well we have a thesis now for instance that all automated market makers need to need a new model and uh this is a thesis they were very

9:26strong like we have a very very strong thesis about uh um networks metaphors needs to be composable needs to be multi-chain needs to be as global as as inclusive as possible so those are our thesis but at the end of the story if you have a team that convinces you that is this is a they have a great project you want to

9:54invest in the team world in the project in a way in a way definitely great point and even greater point fabio that you mentioned about uh you know sticking to your investment where you know with the luna uh it it went lower and you guys bought more you know you didn't change your decision you dollar cost average you know and i think a lot of retail traders that jump into

10:16cryptocurrency they often buy uh not at the bottom you know they're buying uh when the hype is there and then it often with the volatility it goes down and instead of buying more uh they change their decision and they sell at a loss or something like that and i think that's a very important point that that you note there um yeah and you mentioned with the

10:38metaverse as well you know just looking at how the metaverse has grown in the last couple years versus what it will become in many years down the road i feel like if you have a three-year horizon or less as you as you mentioned not a lot is gonna get done in the metaverse because it i feel like it's such a it's such a big idea that it really is going to take

11:0310 years plus to come to fruition and do you agree i i totally agree i totally agree i think i think we can always play the game of like the hype and the investment in things that are high are very cool at the moment and everything but i think the the champions of today will not be the champions of 10 years uh from now i i think i really think that because because on one side

11:32you are really sticking today to your mod to to to the current model but the the future model will be faster more beautiful and a and more more compelling to everybody and and you and we have we really have to to do a long-term investment in things uh in things like this because this is going really to to to change completely the way we use the internet i mean we all

12:00know roblox we all know uh all this kind of all these kind of things but is a this is not decentralized this is not in the hands of the users and this is not uh what what people are really uh i mean i mean generations and generations uh after mine are really really want to have something to deal with and basically to to get a

12:28like being as the stakeholders of these things and this is going to change completely impliment environment also because people are going to to work with these things because they are stakeholders of these things and it will not be like investment companies it will be normal people or young kids and it will be fantastic in a way an evolution of youtube youtubers right

12:53definitely yeah and i'm curious also on your thoughts on nfts and if iconium is also investing in that and do you see you know underlying fundamental value in them at the stage they're at right now yeah that's a very interesting question very interesting point of discussion in our team there is actually more fights than discussions about this but basically i think i i think uh

13:21we are uh we're not specialists in terms of like content we're more specialized about platforms and uh and the business models and everything so if you think about that if you think about what what is today nfps i i actually i personally have a consultant in new york that helps me to buy nfts this is not my

13:47job this is not the job the problem of economy is to invest in the platforms that work for nft users and i think i think we have you have a great uh opportunity today i i don't think that everything is is over with openc there will be other things there will be more the surprise things and uh but but then if nft says it's just the beginning i mean it's just

14:14we're just talking about uh rights that are not exclusive to some pictures or some images or something so it's basically almost nothing nfts can represent anything like buildings uh paintings uh and and i think i think it's going to be great as i think and if these have done more for the market for the from the cryptocurrency market market then

14:43defy because nft is now like i was uh last week in san francisco it's all about dupai because if you go to los angeles probably it's good it's more about dubai because that's perfect it's about media we're not investing in media we're not capable i mean we know companies that you probably know like a realm uh that they have like the older team is coming from real estate they know where

15:10to buy an ft to put their things in any metals and things like that and we are we are not we're more technology oriented but i think the opportunity for the market is unbelievable i completely agree fabio and i really like what you said about platforms i always say the same you know i would rather invest in uh youtube the platform than youtube videos you know content on

15:34the platform because the platform is going to be hosting the network effect and the same goes for openc you know there have right now it's it's centralized and there's a lot of issues with openc and there's a lot of nfts that have been lost on the platform and hacked as well and there's been a few alternatives that are supposed to be more decentralized in the hands of the

15:54people but none have really prevailed so far so eventually something will prevail uh in that sense and there's an opportunity for a platform there as well now you mentioned at the beginning that you have like 35 companies in the in the portfolio and you've made a lot of investments but the amount of companies in blockchain is a thousand times more than the

16:20investments that you have made how do you determine and and be scrutinous with you know i'm i'm not going to invest in this one because there's limited opportunities um on where i can put this capital uh that's uh that that is that's that's very interesting because on one side we decide on the other side the projects decide so on one side in the bear market we were

16:47able with very little capital because at the beginning we raised very little capital to enter into terror uh projects when a project when there was only binance and wabibi for us they even if we have like multiply by by 20 or 30 our capital is we would not be able to enter into deals such as this one so on one side you you try you try to get into the

17:13deals in other sites you have to select deals and when you select this and you have the opportunity to invest uh in this world where now they are like tens of billions of dollars that are invested in blockchain the competition is very high so either you are following the the flow or your contrarian and you try to get the things that

17:40they're not uh like favorable or favorite from from from the the largest investors we obviously because of our size we obviously try to help startups and help them in the beginning to get to a later later stage and then there are some deals that are super hot and uh it's very difficult to enter but at the end of the story i think it's always like a

18:08a feat a special feature that you have between investors and and entrepreneurs and uh i've been an entrepreneur myself uh for one time and uh you have to you have to accept you have to accept the idea that is uh the business plan is great everything is great but at the end of the story you have to understand who your investor is because the investor can can make

18:31damages who is it who who is the inter who is the entrepreneur and decided at that point whether there is a fit and basically if you want to have a long-term relationship with the company or the project you're investing with and yeah great point fabio i feel like every point you make is such valuable knowledge for people that are starting to get involved

18:56in investing as well as just entrepreneurs that are looking to raise capital so thank you so much for for your knowledge and expertise i really do appreciate it for the viewers that are looking to learn more about your portfolio companies uh and just iconium in general what is the best way for them to learn more you mean to learn for uh new projects

19:19yeah well for about you guys and follow along with what you're doing okay okay uh well basically we are uh we're really i was mentioning the taxes we had a big discussion long discussion like one week discussion in the theme about about axis i think we're looking for very new models in terms of taxes that have been basically underperforming even the the

19:44largest tax in the texas underperforming the market i think we need a new model we are really looking at new tokenomics and new token models and uh but we're also looking at a at things that are like supporting i think one of the one of the things that i i think is the most important is like let's suppose that this number is right 300 million people in the world are

20:12on on crypto cryptocurrencies i think we're very far from from mass adoption right yeah and what is the next step to make that to to create mass adoption okay we have one thing that is kind of out of our control which is regulation so it's not completely under under our control but all the rest is like internet in the in the early days

20:42it be it belong to tech guys developers there was no user interface there was no usability there was it was not easy to use you had to be a nerd to use this chemist so i think this is the thing that we need to pass on and and the the the path is like okay centralized exchanges from centralized exchanges to metamask or whatever wallet

21:10you you want i hope there will be tons of competitive metamasks and then you enter the real world of of uh of blockchain i think this is a really the most important thing that i see and i and i think that there will be i mean we're we're investing a lot in terms on on new outlets on uh cross chain solutions on everything

21:37i mean we're spreading our bets obviously but we think we think we think there are opportunities uh where there is an added value and above all uh let me say like next generations that can learn how to interact with block with cryptocurrencies without going through an exchange that in a way is like etoro or

22:04or whatever whatever stock trader you can think of definitely great point fabio and i completely agree uh i feel like the paradigm shift is going to continue in the way that people will be able to access their first crypto and and hold on to it and manage it and trade it around so a lot to look forward to as the cryptocurrency industry continues to grow thank you so much for all of

22:27your time and knowledge i really appreciate it i will leave the links to iconium and your firm in the description box below for the viewers as well so if they want to learn more they can follow along and let's definitely follow up in the near future absolutely thank you very much ashton because it was a very play it's a it was a pleasure to talk and uh clearly hope

22:49to be in touch and in the future maybe do some business together