In contrast to the rest of the imploded FTX crypto group’s black box financials, venture capital (VC) investments of Sam Bankman-Fried (SBF) and his sister trading house Alameda Research have been made public.
An Excel document leaked earlier this month and first shared by the Financial Times (FT) shows that more than $5.4 billion of capital was deployed through 10 investment vehicles across nearly 500 investments. By most accounts, that’s a lot of dry powder, so to speak, for a company founded in the spring of 2019 to ignite over just a short period.
The two biggest investments, an eventual $1.15 billion that went to crypto mining company Genesis and a hair under half a billion for artificial intelligence (AI) startup Anthropic, have been described by at least one “crypto influencer” as “ridiculous.”
A Sprawling, Sloppy Empire
Just like FTX and Alameda bet big and went fast before eventually going bust, it appears that, just like its parent firm, the venture vehicle was equally disorganized with next to no record keeping.
The Excel spreadsheet of Alameda and FTX’s equity portfolio was reported by FT to have been shown around to investors while SBF was seeking rescue funding. With the investments offered as collateral for a new line of bridge credit to help FTX survive the run on its assets, an exodus that would ultimately lead to its collapse in just 48 hours.
While that line of credit never materialized, it’s also plain to see why the pledged collateral investments failed to garner much interest from would-be creditors.
Still, FTX’s venture fund kicked off its existence with a splashy start – hiring former Lightspeed Venture partner Amy Wu, who has suffered a recent run of bad luck in the crypto space since being named in a separate lawsuit against the company behind the Bored Ape Yacht Club NFTs, Yuga Labs. Wu stepped down from the fund before FTX’s bankruptcy, as cracks in the enterprise began to show.
FTX Ventures raised $2 billion, making it one of the crypto industry’s largest war chests at the time. It joined the likes of crypto and web3-specific fund Paradigm, which invests from a capital pool of $2.5 billion. In comparison, blue-chip VC a16z has raised $7.6 billion across four crypto-focused investment vehicles.
Disgraced FTX founder SBF also invested in projects using what were believed to be his own funds and were later revealed to be built on the back of commingled customer deposits.
In light of the collapse of the cryptocurrency exchange, those dealings have put peers in the spotlight for their actions, as Coinbase, Binance and Kraken maintain venture funds and their industry investment platforms remain in operation.
Where the Money Went
The FTX Ventures site, which is no longer live online, once stated, “We move fast. If we have conviction, we will invest. There are no external ‘stakeholders’ or ‘committees’.”
The site went on to say, “We measure time horizons in decades. We don’t mind if you’re anon. We won’t ask you to present in front of an investment committee.”
One of the bigger reveals from the spreadsheet, as reported by Axios, was that Bankman-Fried appears to have secretly funded independent crypto news site The Block and helped finance the purchase of a Bahamas apartment for Block’s CEO Michael McCaffrey, who has since left the company.
A $200 million investment in VC fund Sequoia is also listed in the spreadsheet. Sequoia was one of FTX’s more prominent backers and, as reported by PYMNTS, has since written off $150 million of that stake.
Hundreds of equity investments are listed among the fallen exchange’s holdings. Decentralized Finance (DeFi) projects and other crypto startups, including a glut of NFT initiatives, account for a majority. Still, video game studios, betting platforms and even a military drone maker and fertility clinic are listed as receiving funds.
Only time will tell what happens to the companies listed and whether their funding will be clawed back during bankruptcy proceedings. However, many of the entries listed have no discernable link to active businesses.
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