A first-check crypto fund investing in the

We believe next-generation networks will grow bigger, faster because they are owned and operated by users.  

Variant partners with founders at the earliest possible stages.

/writing/the-ownership-economy-crypto-and-consumer-software

Silicon Valley has known for years that ownership is a keystone of building great products. In order to build the best products, startups need to attract the best talent, and to attract the best talent, offering equity in the form of stock options is a best practice to align employees with the company’s success. But today, only a small group of insiders — founders, investors, and employees — get to reap the rewards of ownership, while the broader community who are also instrumental to a company’s success are locked out of this opportunity for life-changing wealth creation. Just imagine: if every early Uber driver had received $5,000 of Uber stock when it was a seed-stage company, that equity would be worth $25 million by the time the company went public. 

Given the overhead of legal contracts and legacy financial infrastructure, it has historically been infeasible to distribute ownership at the scale required to reward every user who participates in the value creation of today's largest platforms. Crypto tokens are an innovation that enables the movement of value with the speed of information, akin to data packets. Tokens can unlock the vision of more meritocratic distribution of ownership and align incentives toward building networks that grow bigger, faster. We call this the ownership economy — products and services that are built, operated, and owned by their users — and it is unfolding even faster than we initially imagined when we started Variant. 

We believe that ownership will be a keystone of all next-generation products and platforms. The first to realize this were the developers and technologists who contributed to the movement by building and operating the first multi-billion dollar internet scale networks: Bitcoin and Ethereum. Now, a new generation of entrepreneurs are rebuilding the internet with this more meritocratic and competitive model in mind. From developer-facing infrastructure to financial marketplaces, social media, gaming, digital art and collectibles, ownership has unlocked a new design space for scaling products faster than predecessors because users are aligned with their success. Some examples from our portfolio: Uniswap is a financial exchange, similar to Coinbase, where users who make the exchange liquid are rewarded with fees and given tokens conferring governance rights. Mirror is a publishing platform and toolkit for Web3 creators, where users — rather than the core team — decide how to grow the platform. Blitmap is one of the healthiest communities in Web3, whose users are anchored around ownership of NFTs created by artists and remixed by community members. And the list goes on.

The insight that next-generation networks would be built, operated and owned by their users is the reason why Variant was founded: to support and push forward the ownership economy. Beyond driving positive social outcomes in terms of how wealth is built and distributed, we believe that moving and distributing ownership at the speed of information is also the most optimal way to scale software services and communities. This is proven out by quantitative data: in April 2021, $122 billion in transactions took place on decentralized exchanges, up from less than $1 billion a year earlier. Ethereum settled more than $6 trillion in transactions in the past year despite being only 6 years old. Art Blocks, a curated digital art marketplace has seen billions of dollars in transaction volume grow alongside a fanatical community of collectors, including us.

Success for Variant is a world in which everyone becomes an owner of the products and services that they use. For this future to become reality, we need to continue to pull it forward. We believe it will take the support of a new kind of investor — one that is crypto-native but also has deep empathy and intuition for mainstream consumers. That is why we are thrilled to announce that Li Jin — our friend and a former colleague at Andreessen Horowitz — is merging her esteemed Atelier Ventures with Variant. The New York Times called Li the “It girl of venture capital,” but those that have worked with her know that she is an incredibly smart, thoughtful, and mission-driven investor. Li deeply believes in the values of the ownership economy, and her expertise in consumer and creator products is unparalleled in the crypto space.

As Li beautifully outlined in her blog today, crypto and the ownership economy are how we fully realize the vision of the passion economy that she laid out in 2019 with her seminal essay. The future of consumer technology is in crypto, and for it to fully blossom, we need investors who can help navigate the next wave of adoption from the early majority of internet users.

With that, we are pleased to announce a new $110 million first-check fund to continue investing in the ownership economy — from consumer platforms to gaming to infrastructure to DeFi. By design, we are sized for early-stage investing, where our expertise in startup building, protocol design, and consumer-focused go-to-market strategy can really move the needle for companies, networks, and DAOs.  

Given our vision of user ownership, we also felt that it was imperative for Variant to embody and live our own thesis as a firm — to be owned by our users, the founders that we back. Therefore, we purposefully expanded Variant’s investor base to include over 100 of the brightest minds and builders in web3, crypto, and technology, including builders from Uniswap, Compound, Foundation, Zora, Yield Guild Games, Mirror, and more. This enables us to take a decentralized approach to scaling our operations. The Variant Community will take an active role in shaping the fund's success and supporting projects in our portfolio. We aim to build a firm that adds value by turning our network into a product that founders can use and own.

If you believe in a more equitable internet and are building a crypto project in the ownership economy, we’d love to hear from you.

Variant Fund II: $110 million fund built for the ownership economy

The passion economy is the what, the ownership economy is the how

Last summer, I left Andreessen Horowitz to start Atelier Ventures, an early-stage venture firm devoted to the passion economy: new platforms that enabled users to “monetize individuality.” In a world in which one-third of people’s lives are spent working, providing more freedom in how people make money is a direct way to improve their quality of life. The mission has been crystal clear since day one: to create paths for economic mobility at scale by allowing people to monetize their skills and creativity and lowering the barriers to entrepreneurship. In the midst of COVID lockdowns, that mission became even more urgent as large swaths of the population suffered job loss and turned to online platforms for income.

As I was starting Atelier, Jesse Walden was working on Variant Fund, a seed-stage venture firm focused on the ownership economy thesis, backing software that is built, operated and owned by users themselves. I first met Jesse Walden when we were both working at a16z: he was on the crypto team, and I was on the consumer team. In those days (2018), there was a wide gulf between consumer applications and crypto, and the deals that our respective teams evaluated hardly overlapped — yet in spite of that, we often mind-melded over internet creators and online platforms. 

Fast forward to today. Both of our funds are notably different in a sea of venture firms: they exist not just out of a desire for financial returns, but to support companies that catalyze greater social and economic equality. Our missions were, and are, two sides of the same coin: ownership is a cornerstone of financial freedom and enables greater enfranchisement of participants in the networks to which they contribute their time and energy.

The ownership economy has the opportunity to address one of the biggest and most morally troubling issues of our time: economic inequality. As the wealth gap continues to widen to levels not seen since just before the Great Depression, the best way to combat this is to enable everyone to become an owner of wealth-building assets. For too long, ownership has been restricted to a privileged set of individuals — whether on the basis of geography, network, expertise, access, or for regulatory reasons. This phenomenon is especially true in the online creator economy: despite platforms’ critical dependence on the contributions of creators and users, platforms’ value accrues to a cadre of founders, early employees, and investors, rather than to users themselves. Furthermore, to maintain defensibility, creator platforms own and lock in users’ data, content, identities, and interactions — leading to erosion of creator leverage and lack of control of their own businesses. As more of our time spent and work opportunities become mediated by online platforms, giving ownership of these platforms — in terms of value, content, and data — to their participants becomes a powerful vector for facilitating social and economic empowerment. Yet, broader distribution of ownership isn't just a more socially optimal outcome, it’s also the most optimal way to scale a network. Platforms that reward their users with ownership align incentives towards creating internet-scale armies of talent that will enable them to outcompete those who don't.

Crypto has showcased the power of ownership in rallying independent participants all over the world to help steward and grow internet-scale networks. The first to realize this opportunity were developers and technologists who were critical to the growth and operation of networks like Bitcoin and Ethereum; since they owned a piece of those networks in the form of their native tokens (BTC and ETH, respectively), they were eager to contribute to those protocols in deeper ways. Now, founders are pushing this more cooperative economic model towards mainstream consumer adoption, resulting in an avalanche of new platforms whose participants engage with the products and services they use in deeper ways because they’re aligned with their economic success. The future of consumer software is crypto, centered around the belief that what users create and the value they engender belongs to them.

User-owned and operated networks are nascent but already percolating in various verticals. For example, in gaming, Yield Guild Games is providing on-ramps to income-earning opportunities in the metaverse via a scholarship program that is community-owned and operated. In the creator economy, Mirror offers crowdfunding and publishing tools and plans to distribute governance tokens to its community; members can use these tokens to propose grants from Mirror’s treasury and influence how its product works. Uniswap, a crypto exchange, distributes its fees to the traders that provide liquidity and make the product useful. And this is just the beginning! 

Today marks a new chapter for both of our funds as I’m excited to announce that Atelier Ventures and Variant Fund are joining forces to invest in software that is owned and operated by its users. Together, we will lead investments in early-stage crypto companies out of our new $110 million fund. Enabled by crypto, the ownership economy is how we can truly deliver on the promise of the passion economy, and consumer technology more broadly. As someone who has worked and invested in Web2 companies for my entire career, this was not a decision I took lightly. But I arrived here in full confidence that the intersection of the passion economy and ownership economy is the future I want to work towards, and the area of technology that holds the most entrepreneurial and equitable potential for humanity. 

Our merger represents a belief that the future of the passion economy, and of consumer software, is crypto. Together, our partnership — Jesse Walden, Spencer Noon, and I — will back founders at the earliest stages. Jesse was an early believer in crypto’s consumer potential and gained hard-won insights from a number of vantages: as a founder of Mediachain, an early protocol that pioneered ideas since popularized by NFTs; a research lead at Spotify, which acquired his startup; and as an investor, where he has written the playbooks on emerging best practices for founders building in the crypto space. Spencer was an early expert in DeFi; a one of the first crypto investors to leverage on-chain analytics to value the fundamentals of new financial marketplaces at DTC Capital; and was also a crypto entrepreneur, starting Bitcoin on-ramp company BTCity in 2014. Together with my expertise in consumer marketplaces and platforms, we provide a diverse and unique perspective that will help founders execute on strategy decisions unique to crypto projects, but also bridge the gap in go-to-market for crypto’s next leg up towards mass-market adoption.

If you’re a founder aligned with our vision for a more meritocratic internet, we’d love to chat.

Atelier Ventures and Variant Fund are joining forces

Podcast: a16z Podcast: How the Passion Economy is Redefining Work

If you are interested in career opportunities in the Variant portfolio, please fill out our Talent Form

Variant is a venture firm built for the ownership economy. We take a decentralized, network-driven approach to scaling our operations and value-add, from sourcing new opportunities to supporting the portfolio.

Our investor base is comprised of 100+ builders in crypto, who each own a piece of the fund.

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We will follow-up with select applicants to schedule interviews. Variant Fund is remote first, based in New York City

We are hoping for candidates from a myriad of backgrounds and hope you’ll consider applying!

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A first-check crypto fund investing in the ownership economy