CVCA Awards

AWARD SPOTLIGHT: Version One Ventures Winner of 2022 VC Global Dealmaker Award for Coinbase Global

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When Version One Ventures first invested in cryptocurrency exchange platform Coinbase Global in 2017, digital currencies were still on the fringe of the financial system.

Version One general partners Boris Wertz and Angela Tran saw huge potential in the space and started looking for a category leader. They came across California-based Coinbase, founded in 2012 by Brian Armstrong and Fred Ehrsam, and were instantly intrigued.

Brian and Fred were incredibly mission-driven around the cryptocurrencies, the cryptoeconomy, and democratizing finance so that’s easy for anyone to participate,” Wertz says. 

Version One invested US$2‑million across two private financings of Coinbase in 2017 and 2018 from its US$28-million second venture fund.

The crypto market went through some extreme highs and lows in the years following, but Version One stuck with its belief that cryptocurrency would move into the mainstream and Coinbase would remain the category leader.

Back then, it wasn’t clear what crypto could become; what was the use case besides money? Today it’s much clearer,” Wertz says. 

Coinbase’s president and chief operating officer Emilie Choi says Wertz and his team were welcome investors because of theirvery specific thesis on blockchain and crypto,” which aligned with how her team saw the long-term potential for crypto.

Working with someone who shared our vision and optimism for crypto – even during a crypto winter – was incredibly helpful and made him a tremendous partner as we built Coinbase,” she says.

In April 2021, as cryptocurrencies continued to gain traction among consumers and investors, Coinbase went public on the Nasdaq with a market cap of about US$100B.

Version One Ventures received 26.95x gross multiple of invested capital (MOIC) and an internal rate of return (IRR) of 176.74% when Coinbase global went public. The exit was awarded the CVCA’s Global Dealmaker Award.

Choi said Coinbase had long planned to go public as we see the potential of crypto as much more than simply speculating on Bitcoin.”

Adds Choi: While trading and investment were the first major use cases to take off in cryptocurrency, just like people rushed to buy domain names in the early days of the Internet, we’re now seeing it evolve into something much more important.”

Wertz says Coinbase has turned out to be a once-in-a-lifetime investment for him and his firm.

Having a thesis that is contrarian to the market, that plays out, is one the most powerful ways to make money,” says Wertz, who still owns shares in the company. Coinbase’s market cap was around US$30B in early May. 

Choi says Version One took a chance on her company, especially since it’s not typical for it to invest in Series D rounds. 

Version One’s confidence in us and continued partnership have been truly instrumental over the last four years,” she says. We’re lucky to have found investment partners who share in our mission for creating economic freedom in the world and are thrilled to have them as long-term thought partners as we continue to build the cryptoeconomy.”

Her advice for start-ups looking to take on investors and/​or eventually go public is to stay focused on their long-term vision and mission. 

It’s important to take on investors that are aligned with those two things,” she says. 

We were very clear with investors during our direct listing that there will be ups and downs, but we take a long-term view. We felt it was critical, especially in the cryptoeconomy, that we were upfront with investors. I believe that has and will continue to serve us well.”