How to protect your crypto in a volatile market: Bitcoin OGs and experts weigh in

Crypto is a volatile place. Money can be as easily lost as made through the ups and downs of Bitcoin and the wider market, and there are massive decisions to make. Should you just hodl — invest and do nothing — or actively trade the market? How many coins should your portfolio hold? Self-custody or keep your funds on an exchange with pre-determined stop losses?

Basically, how do you protect your stack from the million and one things that can go wrong? We asked Bitcoin OGs and experts in the space for their advice and opinions.

Walk before you can run

When faced with the question of how best to protect your crypto, OG Brock Pierce is circumspect. The former presidential candidate and co-founder of Tether and points out that not everyone is in the same place.

“Early noobs looking to begin their journey might go to Coinbase and purchase their first $20 or $50 worth of crypto, and it’s not an investment in crypto, but an investment in yourself. However, the moment you have a material investment – and that is a different amount for everybody – then it’s important to understand the basics of hodling and investing in crypto,” he says.

“It’s always better to walk before you can run, to walk in baby steps and don’t let FOMO (fear of missing out) cloud your judgment. This is a marathon, a long game, so take you time and be informed.”

Self-custody for safety

Pierce repeats the mantra, “Not your keys, not your coins.” This is one of the most widespread pieces of wisdom in the world of crypto, where people are encouraged to take responsibility for holding their own crypto rather than outsourcing it to an exchange that can get hacked.

But there are dangers with this approach, too, and if something goes wrong, there is no centralized bank authority to reset the passwords or refund money lost to scams. It’s like holding cash under the mattress — the entire responsibility rests with you — and is referred to as self-custody in crypto.

Itai Avneri, deputy CEO and chief operating officer at INX Limited (Supplied)

Self-custody is the key to safe trading, according to Itai Avneri, deputy CEO and chief operating officer at INX Limited, the first and only fully regulated, end-to-end platform for listing and trading both SEC-registered security tokens and cryptocurrencies.

“Self-custody is the key here. Especially when thinking about digital securities and not just crypto. Trading on a centralized exchange that provides the confidence and protection of regulation and, at the same time, trading in a decentralized manner when the customer holds his / her own assets. Generally speaking, your wallet, your keys, your assets. This is the best way to protect yourself from a sudden hold on withdrawals or other events we witnessed in the past year,” Avneri says.

But Bitcoin billionaire Tim Draper of Draper VC says that while that’s true, institutions aren’t keeping funds on a Ledger in a drawer.

“I no longer believe that my dollars in the bank are very safe. They are subject to political winds and inflation,” he says.

“The safest personal money is BOL—Bitcoin on Ledger. The safest institutional money is BAC— Bitcoin at Coinbase,” Draper continues.

Tim Draper
Tim Draper, founder of Draper VC, chatting with journalist Jillian Godsil.

Diversification: Don’t just buy eggs

Pierce points out that people advanced in sophistication can look at investigating yield farming or decentralized finance. This allows people to not only protect their crypto but also to look at increasing it through earning yields — but again, this involves risk.

He emphasizes the importance of investing in your own education and notes the importance of diversification.

Brock Pierce
Brock Pierce, chairman of the Bitcoin Foundation (Supplied)

“If you are participating in those markets, then you by necessity take on the counterparty risk associated with those platforms, and how you mitigate those risks is through diversification, but not having all your eggs in one basket. If any one asset fell, it won’t wreck (rekt) your entire portfolio.”

Diversification in crypto is tricky, as Bitcoin and the rest of the market tend to move up and down at the same time. But Pierce warns against putting too much money in more volatile coins, for example, memecoins, in case of a downturn where the pain will be magnified.

Andrew Latham, a certified financial planner based in Rolesville, North Carolina and the director of content for financial, echoes Pierce’s restraint and suggests looking outside of crypto as well.

“The key to surviving market downturns is diversification and a disciplined approach. Don’t put all your eggs in one basket. Spreading your investments across various asset classes can help cushion against volatility. Keep a disciplined approach to crypto investing, focusing on long-term goals over short-term market fluctuations.”

And while crypto investing is often a little bit too interesting for its good, he says successful investing is often the opposite.

“As the old adage goes, ‘Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas,’” Latham says.

High-conviction bets

Sometimes, it makes sense to be overweight in a blue chip, market-leading token though, as Warren Buffett’s 50% portfolio allocation to Apple shows. There are plenty of Bitcoin-only hodlers, but Lakov Levin, the co-founder of the new DeFi investment platform Locus Finance, leans heavily on Ethereum.

Levin suggests: “Ethereum is the blockchain, which is used as the fundament for the financial evolution of the 21st century. It is a hub for hundreds of protocols that build value for its users. Holding Ethereum is similar to holding a fraction of the internet and value it provides to users. It is truly a remarkable financial opportunity.”

Levin notes that Ethereum’s hodlers can stake their assets and receive 5% APR in ETH itself and points out the “Ethereum blockchain burns fees for each transaction made on the blockchain, which makes Ethereum a deflationary asset.”

“I do not think that ever in human history we saw a deflationary asset that generates consistent yield and has potential for such innovation,” concludes Levin.

Stop Loss
A stop loss can prevent further losses. (Pexels)

A tool to stop losses

Pierce is sanguine about overall market dumps if you are positioned properly. 

“If the market falls by 10%, take the hit using something like a stop loss, and try to recover in the next run.”

A stop-loss is a risk management tool that automatically sells a token once it reaches a certain floor – predetermined by the user. It is designed to limit losses but can be a blunt tool in the crypto world, where movements of 10% are common and could see all assets dumped as a result.

Lakov Levin
Lakov Levin, a co-founder of Locus Finance (Supplied)

Levin is cautiously bullish on stop losses, which basically allow traders to close a trading position at a specific price.

“The effectiveness of any tool lies in the hands of those who use it. The most important thing about ‘stop losses’ is the feeling of control, which protects from the anxiety of being in the market.

One of the scenarios that stop losses is the management of hypotheses on market behavior. When entering a trade, a trader has a hypothesis of the behavior of the market, which leads to opening a trading position.

“Stop losses allow you to pick the price where your thesis is rejected by the market and limit your loss, which is a must thing to have for long-term trading. But ‘stop losses’ do not save from cognitive biases, which heavily affect trading. In this case, a trader may re-enter trade a few times, breaking his own rules under the influence of greed or fear. It is important to have discipline to follow your own rules.

“One of the rules that I used when trading is when hit by stop loss, I take a break from trading this asset,” says Levin.

Pierce is not an active trader and sees himself more as a long-term participant in the market. He appreciates that market volatility is not a negative thing and that tremendous wealth is made in volatile markets — the more movement, the more opportunity.

“But it’s not for the faint of heart. You know, you’re riding a roller coaster ride almost every day,” says Pierce.

Options can protect against extreme volatility

All-time highs – and all-time lows. Recent reports in The Wall Street Journal point to SpaceX writing down the value of its Bitcoin holdings by $373 million. It is currently unclear whether SpaceX sold or merely reduced the value of its digital assets in its accounts. This may cause difficulty in the future, as U.S. accounting rules dictate that once written down, the value of Bitcoin on company balance sheets cannot be adjusted upward, even if its price rises.

The subsequent downward movement took many by surprise — established investors and newbies alike. What other tools are available to users to protect their crypto? Well, a 50-year-old model created by Nobel-prize-winning professors could be an option.

Options trading gives the trader the right or obligation to buy or sell a specific security on a specific date at a specific price – it’s a contract that’s linked to an underlying asset such as a stock or security. Since 1973, options have been priced using the Black-Scholes model originally authored by two university professors. This mathematical equation estimates the theoretical value of assets based on implied volatility, taking into account the impact of time and other risk values. It is to this day regarded as one of the best ways to price an option contract.

Asked if he might consider using a tool like options, Pierce is cagey. He reckons that leverage is the demise of most people’s wealth. Leverage is the use of borrowed funds to increase one’s trading position beyond what would be available from one’s cash balance alone.

“Be very careful playing with leverage. It’s a tool for hedging to try and achieve great gains but can be the thing that creates more problems if you are not a skilled trader.”

Pierce has bought into options in the past – a few times where he tried to swing for the fences with leveraged option bets.

“It’s not worked out well, for me, because one of my problems is I’m so close to the market, that the markets are not as rational.”

Pierce quotes the recent SEC/Ripple legal action. He didn’t trade on this occasion, but if he had, he would have bet on an altcoin bull run.

“It didn’t happen. If I had followed my gut, then I would have bought and been wrecked the next day.”

As Pierce said, that’s why he’s not an active trader.

Stop losses and options?

A new protocol called Bumper is launching this month, claiming to provide a safety net for downward volatility. It combines stop losses and options in a way that co-founder Jonathan DeCarteret claims is cheaper and more efficient than both those traditional tools.

Jonathan DeCarteret
Jonathan DeCarteret, CEO of Bumper (Supplied)

Bumper’s backtested economic simulations claim a yield improvement of 46.2% over options pricing during the 2022 bear market. This is demonstrated through a historic simulation report audited by Cryptecon and CADlabs.

“Decentralised Finance (DeFi) typically has low latency and high frequency of liquidity, which poses certain complexities for the model.

“Option desks make great use of pricing risk but have to add their costs on top. Bumper evolves the now half-century-old Black-Scholes equation to leverage all the unique properties of DeFi, such as pooled liquidity, smart contracts and protocol composability. Two years ago, we raised $20 million in funding to create a superior crypto equivalent,” says DeCarteret.

Don’t fall foul of criminal scams

The membership program enables users to save up to 90% of compliance and recovery expenses in case of a crypto breach. Not surprisingly, CEO Roger Ying says to focus on prevention, detection and recovery.

Roger Ying
Roger Ying, CEO of (Supplied)

“Crypto users need to be educated on ways to prevent, secure and make sure they are not transacting with illicit entities otherwise, they may be implicated in a crypto crime,” he says.

“Furthermore, there are a growing number of ways to monitor your crypto on the blockchain and be immediately notified of unintended transactions and stop them before they get confirmed.” He adds that if you still end up the “victim of a hack or rug pull, understanding the necessary processes to recover crypto is very important both in time and expenditure savings.”

Hodling as a safe course

Of course, hodling large-cap cryptocurrencies is probably the safest and easiest way to maintain a position. Pierce recommends using cold storage provided by hardware wallets as a safe way to keep crypto.

“Back in the day when I started, we used paper wallets. You’d have a new device, and you’d print out the keys, laminate the paper, and chuck it into a safe.”

Sorkin is very direct in his hodling actions:

“Buy ETH, stake it in Lido, receive LDO and find ways to stake LDO. Otherwise just buy Bitcoin and forget about it completely until late 2024 when halving of BTC happens.”

Latham says the key to hodling is patience and conviction. “Invest only in cryptocurrencies that you believe have long-term potential and can withstand market downturns. Regularly review your holdings to ensure they still align with your investment goals. Time in the market does beat timing the market, but that only works when you pick cryptocurrencies that don’t flop, so it’s crucial to vet your investments carefully.”

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How smart people invest in dumb memecoins: 3-point plan for success

Back in 1984, a U.K. television advertisement for Kit Kat chocolate bars was set in a music label’s office where a keen young band played their demo for a bored music executive. Afterward, they were served the famous chocolate bars and the manager said:

“You can’t sing, you can’t play, you look awful… you’ll go far.”

This is as close as I can get to explaining the appeal of memecoins to sensible, smart and intelligent people. But don’t be fooled: Smart people are making a lot of money out of dumb memecoins — invariably at the expense of not-so-smart people without good timing.

PEPE is making memecoins great again. (Twitter)

And timing is everything in memecoins, which typically have no utility for anything except having fun and making money. So, without any fundamentals to trade on, can you still take a “smart” approach to making money by trading memecoins?

On Yavin, co-founder and head of business at Syndika, comes in with a hard “no” to that idea.

“Anyone who says they have any trading strategies with memecoins is talking absolute BS,” he says, adding the only reason memecoins have experienced a rush of interest this year is because of the bear market and crypto winter.

“People need to do something with their investments, and they cannot wait until the next bull run. These people are not interested in investing in the real projects that take years to build. And they’re all about flipping and all about making a quick buck. That’s the reason,” says Yavin. 

Vitalik Buterin’s best-ever investment was DOGE

But no lesser figure than Ethereum co-founder Vitalik Buterin — possibly the smartest person in the entire industry — turned a $25,000 investment into the original memecoin Dogecoin into many millions. He told podcaster Lex Friedman in 2021 that he’d sold $4.3 million of DOGE during 2020’s lockdowns and reports at the time suggested his remaining stack of Dogecoin was worth $20 million.

Vitalik on Lex F
Vitalik Buterin told podcast Lex Friedman that DOGE was his most successful investment. (YouTube)

“That was one of the best investments I have ever made,” he said, although he added that when he bought at $0.008, he certainly did not expect that return. He gave his profits to GiveDirectly.

Tom Mitchelhill is a financial journalist who worked for various cryptocurrency publications and now writes for Cointelegraph — so, he’s definitely on the smarter and better-informed end of the spectrum. 

He tells Magazine he finds memecoins fascinating. Mitchelhill discovered them early on in his crypto writing career and has been engaged ever since.

“My interest is financial – this is a for-profit play – but it’s also fun,” he says.

“They can be dumb, but there is something about memecoins that is also culturally significant. Why else would a huge number of people get involved?”

Dogecoin is the original — and some would say the best — memecoin. (Pexels)

What should you look for in a memecoin investment?

Evgen Verzun, director of Kaizen.Finance — a secure blockchain platform for token launches — is a big fan of memecoins and understands the need to try and jump on what you think the next one might be. 

Evgen Verzun
Evgen Verzun is the director of Kaizen.Finance and a big fan of memecoins. (Evgen Verzun blog)

“Let’s say you have ‘missed the hype train’ of Dogecoin but you still want to become a crypto millionaire. What do you do? You are looking for something similar that hasn’t ‘left the station yet,’” says Verzun.

For 120,000 or so hopefuls this year, the train gathering speed away from the station was PEPE. Based on the popular crypto meme of Pepe The Frog (but having no relationship to creator Matt Furie), the website cautions it’s “totally useless,” which strangely seems part of the appeal.

Mitchelhill, for one, likes PEPE:

“When it comes to the most recent king of memecoins, PEPE, the founders categorically say there is no utility, and that makes me laugh,” he says.

According to CoinMarketCap, the market cap of PEPE surged to $1.5 billion in early May, but then the price plunged around 80%. Showing the massive volatility for which memecoins are known, since the first draft of this story was written, the market cap has increased by $250 million to more than $600 million.

PEPE Price chart
PEPE price chart. (CoinMarketCap)

While the people who bought at the very top probably haven’t made a wise investment, plenty of smart people make money on the way up and get out before it plunges.

Mitchelhill claims to not be much of a gambler. He tends to invest small and hopefully exit with more. He explains the real killing is made by insiders who tend to buy half an hour into the launch.

With PEPE, once Mitchelhill had reached a 500% profit, he took his money out. This is typically how smart investors operate — some gain, some risk, some returns. Having a clearly designed plan for when to take profits is a smart move. The vast majority of people hang on to their investments in the hope that:

a) They will go up further, or

b) They will get back to their peak price. 

Pepe the Frog
Pepe the Frog featured in the “Feels Good Man” documentary. (“Feels Good Man”)

Three-point plan for trading memecoins

Sara Jane Kenny, Algorand ambassador and founder of OffChain Ireland, is another investor who is very clear about what she is doing and says her portfolio has increased over the bear market as a result of trading memecoins. She has traded in the likes of DOGE, PEPE, SFM and COOP. 

“There are pros and cons to everything, which I’m excited to get into. Many memecoins at the beginning start as just speculation, then it can either grow to pump and dump or they start to build utility and a strong community around it — these [latter ones] are the types of ones I go for.”

Her three-point plan to make money while trading memecoins, in particular, is research, patience and efficiency.

Sarah Jane Kennedy
Sarah Jane Kenny won the Communications Award at Blockchain Ireland recently. (LinkedIn)

Kenny uses the example of COOP where she researched the origin of the token, the team, the community and what progress was happening. After selecting a promising token, she then considers the most efficient way to trade, what fees might be included, transaction speeds and the different prices across different DEXs and CEXs.

She then advocates watching the market and learning the patterns for a time to see when the support comes in, and when the “sells” start happening. 

“Buy low, sell high — it’s easy on paper, but it takes a lot of time to get it right, so practice and keep notes, as the markets can be volatile. Remember to take profits, and only invest what you can afford to lose. You don’t have to sell everything at once: dollar-cost average in, and out, to gain the maximum effectiveness with each trade,” says Kenny.

She reckons the best memecoins are the ones that have a strong community, are building utility, and have some sort of meaning even if it’s a joke. That’s why she sees potential with COOP.

For the uninitiated, it’s an Algorand ecosystem coin based on a series of hilarious fictional videos by Cooper Daniels following an influencer’s quest to travel to Bitcoin Beach. Airdropped to the community, and with Daniels keeping zero tokens to himself, it’s sparked a ton of content and games related to COOP, which surged to become Algorand’s fourth largest token.

“For the rubbish ones, you need to look out for the red flags, like the creator holding the majority amount of the token, if the team is not doxed, there is no progress being made with the token or community. Oh, and make sure the community is not just bots, too.”

Fed Coop
Even the Fed is keen on memecoins, according to this COOP meme. (Twitter)

Being early is the same as being right

Harry Horsfall, CEO of Flight3, is bullish on memecoins. When asked why smart people buy memecoins, he points out that being early is for winners. A successful Web3 entrepreneur whose business was recently taken over by Steven Bartlett of Dragons’ Den fame, he likes to dabble because of the excitement and because he feels his finger is on the pulse and he’s ahead of the retail punters.

Harry Horsfal
Harry Horsfall, CEO of Flight3, thinks PEPE is “brilliant.” (Supplied)

“I think the PEPE coin is brilliant. It very clearly says on the website that it has no utility and that there is no roadmap. It’s just the network effect,” he says.

Horsfall sees people having fun with memecoins but notes there are some serious marketers pulling the levers in the background.

“We are investing in ideas – and yes, 99% of them are not going to work, but there is always that 1%. If you look at Dogecoin, most people bought at 0.000…” Here, Horsfall loses count of how many noughts, but suffice it to say that if Dogecoin ever goes to a dollar there are going to be some very happy people.

“It is a bit like winning the lottery. We are all on a journey, working the day job, but maybe tomorrow we will win.” 

NFTs are memes, too, really

Neil Bodl, full-time degen and founder of BodlNFT, took a break from his day job to explore dollar-cost averaging on Bitcoin and Cardano, but unfortunately, his entry coincided with a bear market. But as the market bottomed out, NFTs caught his eye.

Neil Bodl
Full-time degen and founder of BodlNFT, Neil Bodl. (supplied)

“I’ve always been fascinated by digital collectibles and pop culture. I’ve been watching Dogecoin from the start, for example, but in general, for memecoins to work, they need a certain momentum and push from a community.”

Bodl has long been aware of the Pepe The Frog meme, and watching the chatter on Twitter, he reasoned quite early on that a memecoin based on crypto’s most popular meme could quickly catch alight. 

“A meme like PEPE is faster to share than text or words,” he says, tying it all back to philosophy.

“The psychology of all memecoins is awfully simple. People want just two things in life — bread and circuses. Memecoins satisfy those needs, providing plenty of entertainment and dough. Generally speaking. It only becomes a question of balance because, in this world, nobody can have all the money and all the fun.”

Bodl says that sophisticated traders can use the entertainment angle to make serious money.

“I’m not ashamed to say that I’m a meme enjoyer, but my stance on memecoins reflects their own philosophy: I take them as the gag they are supposed to be. Crypto snobs think that memecoins demean and undermine the reputation of crypto as a whole, but I’ll say that if the industry can be undermined by a bunch of memes, it probably has much bigger problems to worry about,” says Verzun.

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The secret of pitching to male VCs: Helping female crypto founders blast off

Bridget Greenwood is the founder of The Bigger Pie, a U.K.-based networking organization that supports women in blockchain globally. She says that even venture capitalists with the best intentions still end up funding male founders at disproportionate rates.

“I stumbled over the appalling statistic that of all VC funding [in the U.K.], only 3% goes to female founders, 8% goes to mixed teams, and the rest goes to all-male teams,” she explains to Magazine.

“And that initial figure has gone down to 1.5% over the pandemic.”

“In more difficult times, it seems that VCs are falling back on what they know – which is to fund male founders. This is doubly frustrating, as research looking at the impact of COVID-19 points to the benefit of feminine leadership during challenging times.”

According to data from Pitchbook, the trend is international. Last year in the United States, startups with all-women teams received just 1.9`%, or around $4.5 billion, of the $238.3 billion in allocated venture capital. The 2022 figure was down from the 2.4% achieved the year before. 

Seeking to actively change this reversal, Greenwood founded The 200Bn Club with Amber Ghaddar. The initiative takes its name from a 2022 report on female entrepreneurs commissioned by the U.K. government and completed by Alison Rose, CEO of NatWest. A key finding was that investing in female entrepreneurship would add between 200 billion and 250 billion pounds to the country’s GDP.

Bridge Greenwood, founder of The Bigger Pie and co-founder of The 200bn Club.

Greenwood and Ghaddar embarked on a three-month research journey, during which they spoke with academics, investors and VCs. Ghaddar had already successfully raised money for her company, AllianceBlock, so she personally knew some of the struggles.

As Greenwood summarizes, “We got two key points from our research. The first is that you need a warm introduction. A lot of the VC world is all about networking, and so we have gathered some 200 VCs to be part of our network so we can create these warm introductions.”

“The second point is harder to overcome and happens during the pitching process. As soon as it becomes apparent the founder is a woman, then the unconscious bias kicks in.”

Pitching stage

Research published in Harvard Business Review singles out the pitching stage as a significant barrier for women. In essence, it says that men are asked promoted questions, whereas women are asked preventative questions – which focus on risks and put founders in a defensive position.

“Why is this important? Well, regardless of whether you are a man or a woman, if you get asked preventative questions, you are five times less likely to raise money, period,” says Greenwood.

“However, the good news is that if you understand and recognize a preventative question, you can then learn to answer in a promotive way so that you give yourself a much better chance at success. But this needs to be taught.”

At The 200Bn Club, female founders are coached on how to best pitch to VCs, which also includes the somewhat controversial concept of not pitching “like a woman.”

Don't pitch
The abstract from “Don’t Pitch Like A Girl.” (SAGE Publicatications)

While earlier research suggested that investors exhibit bias against women due to their sex, more recent studies have found that the picture is more complicated than that, and that being a female entrepreneur does not diminish interest by investors in and of itself.

A team of Canadian and American researchers conducted an experiment that found investors are actually biased against displays of feminine-stereotyped behaviors by entrepreneurs, whether from men or women. The research, titled “Don’t Pitch Like a Girl,” found that behaviors coded as feminine were associated with negative perceptions about the entrepreneur’s business competency.

Now, that doesn’t sound any better from a gender studies perspective, but from a practical standpoint, it means female founders can work around the issue by using more masculine-stereotyped behaviors while pitching.

“It turns out that while female founders are happy to talk about their team, they are much more self-effacing when it comes to speaking about themselves. And since the VC wants to invest in the leader, this is a damning habit for female founders,” Greenwood says. 

“We work with our female founders to deliver the pitch with confidence, assurance and faith in themselves. And we help them answer the preventative questions in a promotive fashion.”

ConsenSys on equality

Thessy Mehrain, co-founder and CEO of Liquality, has a background that makes her uniquely positioned to understand the system and how to disrupt it. She spent six years creating products at JPMorgan in the U.S. and joined the Occupy movement after the financial crisis, and it was from there that she discovered Ethereum.

“So, I totally fell in love with Web3, but I also didn’t want to be part of something that creates technology that repeats what we have in the legacy world,” she tells Magazine.

While still working at JPMorgan in 2015, she heard Joseph Lubin, the founder of ConsenSys, speak at a fintech conference and was blown away by his vision. Shortly after, she jumped ship to ConsenSys and began working on a project to explore swapping between Bitcoin and Ethereum in a decentralized manner without a middleman. That project evolved in time into her startup, Liquality.

In 2016, Mehrain also created the New York-based Women in Blockchain group to help address gender inequality in the sector. The group now boasts 3,000 members.

Working at ConsenSys provided her with great support, access to technology and a co-founder — Harsh Vakharia, who also previously founded the startup Etherbit. Coming out of ConsenSys, Mehrain recognizes she had many advantages over other unaffiliated projects.

Thessy Mehrain, co founder of Liquality
Thessy Mehrain, co-founder of Liquality. (Photo supplied)

The pair successfully raised $7 million in 2021. When asked if she experienced different treatment as a female founder, Mehrain replies: 

“How would I know? I was never raised as a man. However, coming out of ConsenSys definitely gave us an edge and warm introductions. It was at that point, during our raise, that I became aware of the dominance of men in this space. At Liquality, we are focusing on the Global South, so we knew from the get-go that we needed to have diverse representation in our funders. That changed our thinking and our outreach.”

“We knew that diversity makes products more sustainable – it’s not just the right thing to do, it’s the right thing to do in business terms. We needed to explain that to our investors. But it’s more than having diversity at the cap table, it’s what you build afterwards.”

Mehrain and her co-founder have assembled a team that reflects the culture in which they want to grow. “We work hard at this. It’s not an afterthought. For example, we have a female engineering lead and a lot of strong female engineers — but that took work. 

“We are creating a legacy as we go. It’s very important so the next generation of women founders and leaders have role models and supports to help them.”

Corporate backgrounds help

A strong corporate background can also help female founders navigate the stormy VC waters. Ayelen Denovitzer was previously with Bain and Revolut, and co-founding Solvo has been her first startup role. She raised $3.5 million led by Index Ventures over just three weeks last year.

Denovitzer did not notice any limitations due to being a woman, but she is also happy to debunk some common urban myths.

Ayelen Denowitzer
Ayelen Denovitzer, co-founder of Solvo. (Photo supplied)

“There is this notion that female leaders are more risk-averse and are more emotional when it comes to decision-making, but I think that is largely debunked. Of course, there is unconscious bias, but we are making inroads on those notions too,” she tells Magazine, noting that individual differences are much more salient.

“I believe it is more down to individuals – how we mix. I am much more methodical than my co-founder, which is a ‘me’ thing rather than necessarily a female thing.”

Like Mehrain with Liquality, it was important to her that the VCs at the cap table reflected the project’s ambitions. Solvo is a retail-facing financial app that aims to bring the best features of crypto without the complexities and jargon.

“So, we needed retail-facing VCs to come onboard,” says Denovitzer.

Finding the right fellow co-founders is another element more important than gender. Helena Gagern and Grace Wang, co-founders of Web3 messaging app Salsa, both agree.

“We had shared values — which was of top importance to us both – and similar energy levels,” Gagern tells Magazine.

They bonded over a pilot project during two weeks in Austria, where they learned about passion, energy and pragmatism. They knew they would work together on a bigger project, which turned out to be Salsa, for which they raised $2 million.

“We were fundraising in a bear market and initially were looking for $500,000.” 

However, the co-founders quickly realized that this amount was too little and jumped it up to $2 million – which quite possibly ensured their success. 

Another element of their success was that they had met their investors in real life at conferences over the past two years. Those warm introductions went a long way to smooth the path to success.

“I didn’t feel being female was a disadvantage, but I did strongly feel the underrepresentation. This pushed us to approach female VCs as a priority,” says Gagern.

Benefits of being a female founder

Wang tells Magazine that there are a host of benefits to being a female founder. “Once you get over the imposter syndrome issue, being a woman can make you stand out in a male-dominated space. All-female teams are rare, and so we pushed this to our advantage. And we also reach out to other female founders – helping each other.”

Helena Gagern and Grace Wang
From left to right: Helena Gagern and Grace Wang, co-founders of Salsa.

But why the focus on female entrepreneurship? Aside from offering gender equality, there is data that points to female founders achieving better results. According to a study from the Boston Consulting Group, businesses founded by women produce twice the revenue from every dollar in funding than men. Given that they also receive less than half the funding, that’s a better bang for your VC buck.

Statistics compiled by Springboard, which helps accelerate the growth of women-led companies, suggest that even a little bit of gender diversity helps and that startups with at least one female founder outperformed all-male founding teams by 63%. 

Finally, Mehrain is pragmatic in this gender-balancing game and says men often want to help but just don’t know how.

“You know, white males are the best allies. Right? Tell them what to do, tell them what is needed. Make them allies and really have them understand how important this is. Then it’s a win-win for all.”

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The post The secret of pitching to male VCs: Helping female crypto founders blast off appeared first on Cointelegraph Magazine.