Dear Friend and Family,

We’re just nine days away from the US election, and as usual, we are being bombarded with polls predicting the outcome.

Given the questionable accuracy of these polls in recent elections, I’ve stopped paying much attention.

Their track record has been less than stellar.

One platform that has caught my eye, however, is Polymarket—the blockchain-based prediction market.

Though it's banned for US citizens, it has nonetheless gained significant attention, particularly for political betting.

Prediction markets are often praised for their effectiveness, as they incentivize knowledgeable insiders to put their money where their mouth is.

And Polymarket was initially hailed as the ultimate prediction tool because people had to invest real (crypto) money to participate.

That was until last week.

It was revealed that four anonymous large traders, or "whales," placed $30 million worth of bets on Trump, causing his odds of winning to skyrocket.

Clearly, Polymarket's founders overlooked one key factor: people may have motives beyond financial gain when placing bets.

So, we’re left waiting for the early morning hours of November 6.

Or maybe even longer.

Fortunately, the founding fathers built in a two-month buffer between Election Day and the inauguration.

We might just need it—blockchain prediction models notwithstanding.

How to tell if a founder team will succeed

That’s the trillion-dollar question every venture firm wishes had a simple answer.

As some of you may know, we collect psychometric assessments from our founders.

Our aim is to better understand team dynamics, communication styles, and individual preferences, while also identifying patterns that make us even better at spotting great investments in the future.

There are no right or wrong answers in these assessments, and we openly discuss the results with our founders—sharing our own profiles with them as well.

Unlike popular assessments like the Big Five or MBTI, we take it a step further.

We look at more than fourty traits to get a deeper insight into what makes each team tick.

To date, we’ve made sixteen investments through our fund, fourteen of which have been disclosed, with two more to be announced in the coming weeks.

Two key themes have emerged from our analysis: early life adversity and migration.

Founders who faced significant challenges growing up—whether it be financial hardship, frequent relocations, familial instability, or even bullying at school—tend to develop resilience.

And without a lot of resilience and grit, it’s hard to enjoy the emotional roller-coaster of startup life.

Discussing these sensitive topics during early interviews can be tricky.

Yet, more often than not, we’re pleasantly surprised to find that strong founder types wear their turbulent upbringing as a badge of honor, rather than carrying negative feelings about it.

And whether it’s a German kid moving to the U.S. like Peter Thiel, an Iranian-American CEO like Uber’s Dara Khosrowshahi, or one of the many Indians leading the tech world, there’s plenty of evidence that immigrant founders, many of whom faced significant hurdles upon arriving in new countries, are more likely to succeed.

According to a 2022 Forbes article, nearly two-thirds (64%) of U.S. billion-dollar companies were founded or cofounded by immigrants or the children of immigrants.

There’s no singular “perfect” founder profile.

But those who fight every day, refuse to take "no" for an answer, and motivate their troops during tough times tend to fare better, especially when they have no Plan B or soft cushion to fall back on.

Perspective also plays a key role.

The ability to distinguish between a real crisis and a challenge that can be overcome with hard work is often the difference between success and failure.

Coming up: Dinner & Wine Investor Talks, November 14

Have you ever been to our beautiful castle located among the vineyards in the charming town of Neustadt an der Weinstrasse?

A few times a year, we host our exclusive "Dinner & Wine Investor Talks" in this stunning setting.

A small group of thirty investors, founders, and Web3 players comes together to make new friends, learn about the Web3 venture capital industry, and exchange notes.

This time, we’re excited to have Volker Braunberger, Co-Founder of Funds on Chain, give a brief overview on the state of tokenization in the fund industry.

We have five spots remaining for our next event on November 14.

So, if you are an investor interested in venture capital and open to making new friends, feel free to drop me a note by responding to this email.

And while I can’t promise that it will be 25°C in November and we’ll be able to stand outside again with a glass of of wine like on the above photo, there are other spots in this beautiful venue that have an equally stunning view.

I’ve yet to hear from anyone who didn’t find this event wonderful and worthwhile, even those who traveled from afar.

And, as always, we’ve got an wonderful lineup of people who’ve already signed up.

Meet the team at Bangkok, November 11-14

While Marcel and I will be in at Dinner & Wine, Ben and Sagar will be attending DevCon Thailand from November 11-14, 2024, where they’ll be connecting with Web3 founders, developers, and fellow VCs.

Join them and the teams from bitsCrunch, Biconomy, 1inch, Covalent, and Techstarsfor a special networking event in Bangkok. You can register for the event here.

If you’ll be in Thailand during DevCon week, don’t hesitate to reach out.

Recommended

Long-time early-stage VC Mike Maples estimates that 80% of his fund’s returns come from startups that pivoted at least once, if not multiple times.

What’s even more critical, however, is seeing an inflection point where something new suddenly becomes possible, along with the founders' insight into how this will reshape the future.

“The product itself during the seed stage is just a reference implementation of that insight,” says Maples. “But the insight itself should not change.”

One of the best explanations of what a seed fund is truly investing in can be found in his book, “Pattern Breakers”, which is based on his analysis of why some startups in his portfolio succeeded while others didn't.

“The incumbents will fight unfairly if the startup doesn’t do something to change the rules and force a new playing field.”

And my favorite quote from his book: “Make your product a choice, not a comparison.”

After all, when was the last time you compared the technical specs of an iPhone to another brand?

If you don’t have a rainy weekend to read the book, there’s also an excellent YouTube interview where Maples discusses his findings.

Or you could just read a summary written by (our portfolio company) Recall.

Join our stellar investors

Join us in shaping the future of the internet with Web3, AI, and more—and become an investor in our fund.

One of the most prestigious Web3 technology entrepreneurs (of course, a migrant!) just joined our incredible group of investors, alongside with several wonderful people we are very fortunate to call friends of Blockchain Founders Capital.

If you’d like to learn more, reply to this email (which is sent from my personal email account), and meet us in person.

Best,

Wolfgang with Ben, Marcel, and Sagar