Shaun Maguire is a cryptocurrency partner at Sequoia Capital. This crypto-focused VC firm is one of the most active in the sector. He isn’t optimistic about the future prospects for other venture capital firms in the region. Maguire is a specialist in crypto and tech companies that are in their early stages of investing or are in seed. said that other firms who are entering the crypto sector are going to “pull back” on these investments as the market becomes less frenetic.
He stated however that Sequoia would not be included in this category because of the manner in which these investments were made within the company. Maguire stated that the company has ‘permanent intent’ regarding its investments in this sector. Maguire explained:
Sequoia is meticulous in everything they do. We spend a lot of time discussing every strategy change, every investment, and it helps us make good decisions as a group, rather than individually.
The firm has already invested into several companies in this sector, such as Polygon. launched a $500-$600 million fund in February to add to its existing investments and invest in ‘liquid crypto assets to complement its other investments. It also plans to launch a $500 to $600 million fund to invest in ‘liquid’ crypto assets to ‘participate in protocols’ and support token-only projects.
Other factors could also contribute to the abandonment of crypto investments. Maguire stated that there is a fundamental misunderstanding of the potential benefits of Web3 and crypto as new technologies. Some investors see decentralization as a silver bullet. Maguire declared:
It is not the panacea that solves all problems. Decentralization does not work for everyone. It is obvious that you want the vast majority (if not all) of your compute to be centralized.
Venture capital funds have seen a huge increase in the number of blockchain-based businesses. This is due to the increased interest in the market, which has been fueled by Web3, NFTs, and metaverse being popular trends. In Q1, $30 billion was invested by VC companies in fintech and cryptocurrency startups.