Austere Capital — Investment Thesis Summary

A Fundamental Approach to Investing in Distributed Ledger Technology

© Brian Koralewski

Austere Capital is a long-only, fundamentals-based, distributed ledger hedge fund and venture capital firm.

At Austere Capital, we believe that multiple new protocols and use cases will evolve over time. These may or may not use existing public blockchains, and furthermore these protocols may deploy varying degrees of decentralization.

We therefore focus on uncovering particular opportunities that align the potential of DLT along with the right mix of industry and founding teams, as well as strong evidence of user traction.

We are a long-term, “patient” capital fund that invests in teams that will transform industries through insightful and pertinent application of distributed ledger technology.

We invest in these platforms through direct possession of the native token/cryptocurrency along with startup-preferred equity when there is the opportunity to do so.

We evaluate each opportunity on five key characteristics:

(1) Decentralization yields to demonstrably superior outcomes compared to conventional technology.

(2) Robust consensus mechanism, as per the technical white paper.

(3) A properly aligned network incentive structure, as per the token economic model.

(4) Observable growth in network activity over time.

(5) Real-world use cases as manifested by institutional partnerships, end-user traction or successful Proof of Concept trials.

Other attributes such as network governance — which we believe should be as minimized as possible — are evaluated on a case-by-case basis after the checklist above is completed.

We reiterate our belief that distributed ledger technologies, whilst at an early stage of evolution, hold the potential to transform industries and create new business opportunities. With the approach highlighted in the preceding sections, we remain confident of identifying and investing in the potential winners of this nascent asset class.

For our complete investment thesis, please sign up here.

For further information, please contact Brian Koralewski (brian@austere.capital)