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Jack Dorsey Should Not Ignore Venture Capital Funding in Web3: Animoca Brands Founder

  • Animoca Brands Founder: Jack Dorsey Should Not Ignore Venture Capital Funding in Web3
  • Jack Dorsey, the founder of Twitter and an outspoken proponent of virtual currencies, is not a Web3 customer.
  • He is convinced that it will "never be able to escape" venture capitalists' incentives and will eventually become a "centralized entity with a different label."

"You do not own the term 'web3.' The venture capitalists and their limited partners do," Dorsey famously tweeted in December.

That is how he ended up in a Twitter spat with renowned investor Marc Andreesen, whose firm, a16z, has emerged as the most active old-guard venture capital firm investing in Web3 ventures.

However, Yat Siu — the founder of Animoca Brands, which owns The Sandbox and has invested in over 150 other blockchain startups — believes Dorsey should have a better understanding of how emerging technology works than most as an entrepreneur with a handful of companies to his credit.

Siu explained to Insider. "He has the ability to shape it, rather than simply sitting back and declaring that there are no other options." "That does not sound like the Jack I believe we knew."

"Are we just going to complain about it?"

Jack Dorsey onstage at a bitcoin convention on June 4, 2021 in Miami, Florida. Joe Raedle/Getty Images
Jack Dorsey onstage at a bitcoin convention on June 4, 2021 in Miami, Florida. 
Joe Raedle/Getty Images

Dorsey stood by his December tweet last week, emphasizing the importance of open-source technology within Web3 during a Twitter Spaces session.

Dorsey stated during a Twitter Spaces chat with Roelof Botha, a partner at Sequoia Capital, "I wanted to raise awareness about the importance of knowing what you're getting into." He also clarified that his tweet was not intended to diminish the role of venture capitalists in the broader startup world.

"I believe that people simply need to be aware of what they're building, what they're using, who owns it, and who controls it," he added.

Siu is not for sale. For any new society or set of constructs — or, in this case, a new financial system — he stated that "investors and capital" are required to ensure their growth.

Even established players such as a16z, he asserted, will not swoop in and seize control of these projects. If anything, VCs serve to validate their own worth. It all comes down to the size of the returns sought by venture capital firms, which Dorsey cautioned should be modest: "You must invest in the open-source community with no expectation of personal gain," Dorsey stated earlier this month.

Siu also cautioned that the risk capital available to businesses through Web3 has shifted. As was the case in the Web2 era, venture capital is no longer the sole source of funding for startups. Even the means by which these companies raise capital has decentralized, such as through NFT sales.

"I wouldn't compare it to Kickstarter, but there are some parallels," Siu explained. "Your customers and future owners of your assets are the only ones who can fund your venture from the start, which is the entire promise of Web3."

Additionally, the nature of blockchain technology makes it difficult for a single entity to control a sizable portion of the market, as they require a majority vote and a large portion of the space is community-focused on individual token holders. Users will theoretically have a say in Web3 project decisions and will thus acquire "shares" in them through the purchase of crypto tokens.

"I agree that if someone sold more than half of their supplies to investors, that would be a problem, but the majority of projects do not," Siu said. "And any project that does so is probably not aligned with Web3 in the first place or is desperate."

Siu stated that when Dorsey built Twitter, he did so with an eye toward the future and not toward the present, a courtesy Siu believes he should have extended to Web3 concepts.

"Are you contributing to the realization of that future? Or are we simply going to whine about it?" As Siu stated.

Source: Insider

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