When Etienne VantCruz grew up poor in Suriname, he told his teacher that he would never succeed, but that only strengthened his resolve not to follow in his parents’ footsteps. Thanks in part to cryptocurrencies, he’s now living his dream.
Even though vantKruys is now living in a crypto war and remembering his hungry past, at least he’s keeping one foot on the ground. He grew up in poverty in Suriname, where his father was a drug addict and was often in prison.
I was always hungry, man, always hungry. Always so: Shit, I have to eat. Always, always, always – it stays with you. It doesn’t matter if I’m in Singapore, at a famous cryptocurrency conference, in a top restaurant, I’m still going to order my food from right to left. I would start with the price, for example: What can I get? You know that.
In 2017, anyone could easily get into promising ICOs by raising $30-50 million with a white paper full of dreams just because the word blockchain was in it. It’s different today: Venture capitalists have to call and scream to get a small investment of $250,000. The capitalization tables that track investors’ allocations are filling up fast, and investors have had a chance to get a presentation before they have to make a decision.
In this cycle, with the speed of things, you don’t have time to think, notes VantCruce, who runs New York-based digital assets fund TRGC. Often, the only investors who have the privilege of doing full and proper due diligence are alpha-documents like Coinbase Ventures and Binance, for which he says the site will also be shut down after the cycle ends.
When Vant Cruz, 45, got out of his Uber to drive from Amsterdam to San Francisco for Blockchain Week 2018, he saw a sight that took him back to his childhood. The large number of homeless people, many of them mentally ill, remind him not only of his father, but also of the life he is supposed to lead. The reality of the tech startup street was not much different from his native Suriname, a former Dutch colony in South America, where the average income is less than $400 a month.
VantKruys had a difficult childhood and wandered through foster homes to finally end up in a boarding school for 80 other underprivileged children. He was born to teenage parents, and when he wasn’t in jail, you’d see his father walking around town in his underwear, dirty and unshaven – lost in heroin. If his start in life was a poker hand, it looked a lot like a 2-7 – the worst possible combination.
On the first day of elementary school, his teacher told him and five other classmates about the facility: People don’t fall through the cracks.
You have a 99% chance of repeating your parents’ lives when the teacher lectures them in front of the whole class. VantKruys asked if that means he still has a 1% chance of making it. Some of the students began to giggle. In the Surinamese culture this is taboo. They never disagree or say anything clever to the teachers. I got spanked, just like in Know Your Place, he recalls. When he was eight years old, he knew that a very difficult journey awaited him.
But Van Cruys had a plan. He believed in that 1% chance, even though no one would let him dream about it. I imagined it as a boxing match in my head. I have to beat 99 Mike Tysons to get there in one go, he recalls. He worked hard and often got better grades.
Homelessness was just one of the Mike Tysons he had to beat. After secondary school he managed to enrol in the pharmacy department at Utrecht University in the Netherlands. He wanted to be a doctor, and his uncle paid for his plane tickets. But because he had no money, he was forced to sleep in the main station, where he kept his belongings in a locker, and take a bath in the local gym before going to his morning classes.
It’s just another Mike Tyson fight, he thought. He lived his life in survival mode, convinced that one day the final battle would happen, and it did.
VantCruice’s uncle lived nearby, and in 1998 his uncle introduced him to stock trading. The idea of buying part of the business was totally foreign to him, but he was impressed. He sought advice from one of his teachers, who advised him: If you’re really interested in funding biotech markets, look at the hedge funds on Wall Street. VantCruz was in the race.
He used his knowledge of pharmaceuticals to compare clinical trial data with the companies’ public statements and was able to find a benefit that made money. He quit his studies to focus on trading and developed a strategy based on shorting biotech stocks that seemed too promising without solid evidence.
I treat everything as short – it’s all nonsense until proven otherwise.
When the financial crisis hit in 2008-2009, VantKruys recalled going down the rabbit hole with endless questions: What’s going on? What’s it worth? What is money? What’s the bank? What is finance? A part-time stock trader remembers researching all those conspiracy theories around money.
When vantKruys read about bitcoin on a forum around 2013, his first instinct was to call bullshit. But many in her circle soon began talking about it, even at her birthday party in November 2013. One of my colleagues came to the party and asked everyone to make a Blockchain.info wallet. Bitcoin was worth $300 at the time, he recalls.
In 2015, he was convinced that cryptocurrencies were the future. He even left behind basketball, a passion he practiced as a coach for nearly a decade. I have that whole mentality, he says, explaining that he needs laser focus and resilience.
He started moving cryptocurrencies in 2016 and has participated in several early ICOs, such as Lisk and Stratis. They collected so many bitcoins, he recalls. They haven’t all raised Ethereum yet, so it’s mostly Bitcoin that’s been raised.
When he traded in crypto, his bank account was flagged as suspicious and he was questioned about this activity. VantCruice then introduced the banker to cryptography: Hey, listen, there’s something special here. Open your laptop. This CoinMarketCap is my new home.
The banker had some advice: Understood, because that way he can take some of the responsibility and make it easier for everyone. Thus, the following year, the investment company VantCruis TRGC was born.
Today, the New York-based company looks like a traditional mutual fund, with a standard two-and-a-half fee structure that includes a 2% annual management fee and a 20% profit share. That means the company, with $20 million in capital currently in play according to VantKruys, earns $400,000 a year in management fees to keep the lights on, even in a down market where performance can be negative. In a bull market with 100% annual profits (yes, that’s both too high and too low, not for me), the company will want to pocket $4 million from supposedly happy customers.
According to VantCruice, 90% of the initial investment sources were referrals, split between other venture capitalists, developers and a few specialist recruiters. According to vantKruys, networking is the key to success as a crypto VC. He relies on ABN to always be connected – going to blockchain conferences in some 25 countries, weaving in and out of the crowd and blending into the conversations.
The market knowledge you gain at these conferences is insane.
Brian Kerr, CEO and co-founder of Kava, says vantKruys is a well-known and very active investor in this field: At the beginning of every good crypto-currency business is probably Etienne. He is one of the most active investors in the field, focusing exclusively on recruiting and promoting projects on the world stage.
To select an investment, vantKruys uses a four-part model: Founder, product, token economy, and ability to reach users.
The first pillar is a founder with an insane desire to beat his own Mike Tyson ranking and stick to the project even in the worst down market, to find this product that is market-relevant and scalable. I have to say that’s the hardest part, he says. They are trying to find out if the CEO has the personality to stay in trench warfare and come out on top.
The product itself is the second pillar, and vantKruys is looking for projects that have the goal and ambition to be among the top 100 companies in terms of market capitalization. It’s not easy, because even getting into the top 200 is like winning an Olympic gold medal. To be in the top 200 today, you need a capitalization of $250 million, while to be in the top 100, you need more than $1 billion. At each stage, even the thousandth point – which is worth more than $10 million – is just another Mike Tyson for the crazy founder to beat.
The third pillar is tokenomics, also known as token metrics. For VantKruys, the tokens represent the interests of everyone involved in the project, from venture capitalists, founders and developers to users and traders. He wants to know where the chips go and who benefits from them. Search for specific elements, e.g. B. Does this make any sense? Where is the formation of value? Is he leaning towards the team? Does it lean on the community? – He says.
This tokenomics problem, he explains, underlies the recent trend of startups honestly not paying private royalties to investors or developers. VantKruys suggests that bitcoin is the best example of this, with others like DOGE, SUSHI, YFI, and a better bill to match. These fair trade coins have recently outperformed the market.
Despite the rise of honest projects that do even better than venture capital firms like vantKruys, he believes the venture capital industry will survive as long as people are willing to take risks in projects that cannot yet be funded elsewhere. I think the venture capital model will always exist, and will continue to exist as long as people take risks early on, he concludes.
Fourth, there is the question of marketing. No matter how good the project is, there will be no users or investors if there is no use case story to tell. For bitcoin, the immutable peer-to-peer currency was the main attraction at the time, while Litecoin promised faster transactions and Monero offered true anonymity. There needs to be a mature, ready-made group of die-hard early adopters, he says.
Can we distribute the product worldwide? Can we convince people to join this product, this revolution, this solution? How do we get this product to the people who need it? They may not even know they need it!
At the end of the analysis, the vantKruys ask themselves two final questions before investing. 1 : Will I hold on to this chip during a down market…. and the second is quite simple: Is it well spent?
By the latter he means the overall picture, i.e. whether the investment meets all the criteria and whether there really is substance under the fancy suit, which may include an attractive outdoor terrace and a stylish website.
Again, you need to ask yourself these standard due diligence questions: Is it still a good investment? Because, like I said, I treat everything as a short – let it prove itself.
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