Framework Ventures raises Fund IV to invest in crypto infrastructure embedded in hard tech industries

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Our next guest is Michael Anderson from Framework Ventures raising a huge force fund. He's in the waiting room and now he's in the TV Ultra Dome. Michael, welcome to the show. How are you doing

well? How are you guys?

We're doing fantastically.

Honestly, the view here is not the view there.

This view, where are you?

You're view mogging us.

We don't even have any We don't have any windows in this in this studio. And you're sitting here.

This is

like thousands of feet in the air. Just

hang in the castle. Singing the castle. Looking good. Anyway,

where are you calling in from?

San Francisco. Uh, uh, the Transame building.

That's a good one. pyramid. I like that one.

Awesome.

Enough about the view. Let's tell let's talk about you. Uh please introduce yourself a little bit. Tell us about the fund. Give us the news.

Yeah. Um so uh Michael, one of the two co-founders of Framework. Uh the quick history is uh my co-founder Vance and I started it seven years ago.

We're both working uh for you know tech companies. I was at Snapchat. He was at Netflix. Quit our jobs. We were obsessed with crypto. Moved into my parents house and started the fund. Uh, and now we've raised our fourth fund and manage a couple billion dollars.

Did you have any outside capital in the first fund? Like what was the because I imagine with crypto like you can just invest in tokens and like if you're good at trading and you're early like you don't necessarily need institutional capital to get started, but what was the early day? What were the early days like?

Yeah, we we had an institution as our first backer. Um, and it was a small $15 million fund. Um and we we started framework really with a thesis you know a lot of people started with trading or a hedge fund thesis ours was actually the opposite in that we felt like nobody was going after the early seed stage of venture investing in the crypto web3 space in 2019 and so that's what we started with um so it's always been you know a venture thesis and uh I think our first you know or our sec our second fund 100 million was uh kind of like the first institutional fund with multiple institutions and um now we've got Ivy League endowments and sovereign wealth funds and off to the races.

That's great. What was it like in the early days? Was was the crypto community really geographically distributed or were you focused on investing in America or California or San Francisco specifically if you're going after those early stage uh crypto founders?

Yeah, good question. I mean, we we moved back to San Francisco. We were actually in Vance and I were in Los Angeles. We moved back to San Francisco thinking, okay, well, well, that's the hub of tech and we found ourselves basically traveling to all the entrepreneurs at the early days cuz crypto was a global phenomenon. You had pockets in Asia, you know, Australia, UK,

I'd say largely now. It's still it's still pretty geographically distributed, but there's still most of the tech is happening in kind of the the hubs that you would expect. Um, so San Francisco is definitely one of the top places these days. Um, yeah, it was a lot of lot of travel those early couple years.

Yeah. So what's the what's the conference strategy now? I feel like there's debate on like you know how many how many conference what's the perfect amount of conferences to go to in a year as a crypto investor

that that is the the topic of conversation billion that's like a billion dollar travel that much come

uh no you got to do an Asia trip you got to do a Europe trip uh you know make some travel out of it it's uh they're always in fun destinations I think a couple years ago we went to the uh blockchain week in Singapore and then stayed for the F1 race.

Oo, that's good.

It's uh it's always a good time.

Uh what what uh what are you kind of forecasting in in uh crypto right now? Like what what uh you you guys have done well by predicting? I just you know it's a balance of like having some idea of of the future uh and just backing great entrepreneurs, but like what are you what are you excited about with this new fund to invest in? Yeah. So I I think when we started in 2019, we saw crypto as sort of the next frontier where the smartest entrepreneurs that we were meeting with, you know, the whiz kids popping out of the Stanford Harvards are, you know, working on crypto, working on um cryptography technologies. And I think that that's still the case. But I think what a lot of what we're seeing now is people who have domain expertise in different areas, different industries who are saying, "Help me do the crypto. I think this should be decentralized." whether it's energy, um, nuclear, uh, AI or, you know, hard hard, uh, infrastructure. Um, they're they're coming to us and saying, "Hey, like I know how to do energy trading. I've been doing it for the last decade. Uh, help me build a distri distributed decentralized utility uh, so that we can go disintermediate, you know, the util the utilities." And I think that that is kind of the the new thing. It's not crypto just for crypto sake. It's crypto getting imbuged within, you know, really hard tech industries. Um, so it's not really like its own thing anymore. I think now it's just kind of become pervasive in everything.

So the fund's grown, the apertures probably widened in terms of the industries that you look at. Uh, what stayed the same uh throughout all four funds?

I'll I'll I'll take a I'll take a crack. Just remaining bullish on crypto when everyone's calling you an idiot loser is like a really good way to make money, I think. And I feel like you guys have have done that. Yeah.

Just like, you know,

it seems like it's about having a tolerance for being looking silly. And that and that can look like remaining bullish during like moments where everyone's like,

"Honey, you're still you're still doing that crypto thing, you know, at Thanksgiving."

Oh, so so many years of that, you know, it's just going to be another one of those. Um, but when it's a good time to buy, it's it's a bad time to sell. When it's a bad time to sell, it's a good time to buy. Yeah.

So I think uh you know riding the waves um for sure and we hold you know digital assets in the fund

uh each one of them but I I think the thing that has been consistent is really just the venture thesis

and then following the founders and the founders who you know we are seeing like we have a investment in company called Mecca. We got to know them because they were previous entrepreneurs that sold their company to Coinbase.

Oh

they are not doing anything in crypto currently. they could eventually but it's you know how we got to know them was through crypto and and they are building you know a data platform for robotics AI

u so those types of investments I think are just the consistent thread for us and when we find world class founders we're going to back them multiple times

interesting

awesome

cool

uh I haven't been following the mic uh strategy Michael Sailor we have not been following the story closely can can you get me up to speed in just like 20 seconds what's going on over there I mostly just see like the deranged like, you know, AI images that he puts out, you know, where he's like on a lifeboat just like it's like, why are you putting that image in my head? You're literally leaving. You're like escaping the Titanic.

Wait, am I on the lifeboat with you? Am I on the Titanic?

Wait, is this inspiration? Am I Am I supposed to

I I I think you know the the the quick story is that whenever you mix financial engineering and crypto, something bad usually has happened.

Yeah. And I think that that overfitting of the narrative is kind of what's going on with him right now. Um but he's building this this um entity that has multiple layers to it, whether it's convertibles, whether it's preferred, whether it's common,

and he's financing it, you know, in different ways. And and the question is, can he continue to do it with all all of the legs of the stool or is one of the legs going to fall out?

And I I think, you know, the the narratives of him blowing up are overblown. Um I think he's got smart people around. Um, I think it's tough when crypto's down this this much, but this is exactly what happens in all these cycles. If we go back to, you know, the the calluses on our hands over the last, you know, nearly decade of doing this, this is exactly what plays out all four years. Um, so I think we're just in the middle of that right now. And, um, I I think he will be proven right eventually. It may just take him years. And talk about somebody who's been willing to just stand in the face of all of the, uh, the negative publicity. Uh, he he's the best at it.

That's that's a good point. Awesome, Dave. Well, great great to meet you. Congrats on on the new fund and uh yeah, looking forward to meeting more of your founders.

Appreciate it. Great to meet you guys.

We'll talk to you soon. Goodbye.

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it's kind of the goose itself.

It is the goose itself. Have you ever heard of a hecto corn, Jordy?

No.

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