The Crypto Hedge Fund Founder Backed By Steve Cohen Looks Ahead
The Benzinga Fintech Summit is a gathering of the top leaders in payments, lending, capital markets, blockchain and cryptocurrencies in San Francisco Nov. 14. Ahead of the Summit, Benzinga is profiling the fintech thought leaders speaking at the event.
Our next installment is an interview with Arianna Simpson, founder of Autonomous Partners, a cryptocurrency- and blockchain-focused hedge fund that recently received major backing from investing giant Steve Cohen and Coinbase CEO Brian Armstrong.
BZ: What is Autonomous Partners, and what is its investment thesis?
Autonomous Partners is a fund investing in cryptocurrencies, digital assets and blockchain-based companies. We take a very long-term approach and generally invest in things we plan to hold for periods of years — even when shorter-term liquidity is available. Great technology takes time to build, so we have a bias toward patience.
BZ: Why are key investors like Union Square and Steve Cohen and crypto pioneers like Brian Armstrong excited about what you're doing? What value do these investors bring to the company beyond funding?
I guess you'd have to ask them, but my sense is that my long involvement in the space, and the deep relationships I've built over the past five years working in the industry has something to do with it. I have had a longstanding interest in crypto and combining that with the early stage investing I've been doing for the past three years (my business partner and I started a seed VC fund in 2015) was a very natural fit. I think they also see that I am obsessed with the crypto market and the possibilities therein, and genuine passion is attractive in a manager!
The biggest value add is having access to brilliant and very successful people from different realms of investing as well as the crypto industry — they often act as a sounding board for me and serve as a council of advisors to the fund and myself.
BZ: Institutions are hot and cold on blockchain and cryptocurrencies. Goldman dropped plans to launch a crypto desk this week. What pieces need to fall into place to get institutions onboard with cryptocurrencies?
As a matter of fact, Goldman's CFO later clarified that the story was fake news. Interest from institutional investors has never been higher and many of them are quietly moving to enter the space. With the entrance of traditional players like the CBOE, ICE and many others, the road is truly being paved for institutional investors to start allocating. Of course, some barriers remain, custody being a significant one, but with more options coming to market each day.
BZ: How can a blockchain or cryptocurrency startup plan for the long term? What are ways teams can make sure they can survive the addition of any regulatory framework surrounding cryptocurrencies?
One big piece of it is just figuring out how to stay alive long enough to build out a product or network that makes sense, and allowing the market time to catch up. A lot of companies that raised large sums in crypto in 2017 are feeling the pain of a bear market now, as their war chests have been dramatically reduced. Treasury management is not something that was appropriately considered, and they are struggling to budget accordingly as a consequence.
BZ: What makes a currency or startup an attractive investment for you? Do you look at technology or the team first?
I definitely look at team first, as I often invest early, before much of the tech has been built. I have also seen many more companies fail due to people problems than due to technical debt, so I tend to focus on the human element. I also find that if they are generally in a good market, the right team will out product market fit eventually, even if they don't quite nail it from the get-go, and that persistence and flexibility is key to eventual success. I also find that in crypto more so than other types of investment, community is absolutely critical, and something I weight heavily when making an investment.
To meet thought leaders and the hottest fintech startups in person, be sure to grab your tickets to the BZ Summit before they sell out.
Arianna Simpson. Courtesy photo.
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