In a recent presentation at Polkadot Decoded 2024, Mario Altenburger and Max Rebol of Harbour Industrial Capital outlined their strategy to raise a substantial $100 million ecosystem fund. This ambitious initiative aims to bolster the Polkadot ecosystem by providing critical funding to emerging projects, thus bridging the gap between traditional investors and the burgeoning world of blockchain technology.
Understanding the Current Venture Capital Landscape
Mario Altenburger kicked off the presentation by highlighting the existing capital landscape within the Polkadot ecosystem. While there is significant funding available through the Polkadot Treasury and various grants, venture capital (VC) money remains relatively scarce. Altenburger pointed out the skepticism among traditional VC firms towards Polkadot, driven by a perception that it is not as mainstream as other blockchain technologies. This narrative, Altenburger emphasized, is one that Harbour Industrial Capital aims to change.
The Rationale for an Polkadot Ecosystem Fund
Max Rebol elaborated on the need for an ecosystem fund versus direct investment. He explained that while direct investment in individual projects is possible, it is not always practical, especially for the family offices they are targeting. These investors may not have the time or resources to conduct thorough due diligence on every potential investment. An ecosystem fund simplifies this process, offering them a way to invest in a broad portfolio of projects within the Polkadot ecosystem with a single commitment.
Strategic Fundraising Approach
The core of Harbour Industrial Capital’s strategy is their diverse approach to raising the $100 million fund. This strategy includes several key elements:
- General Partner Commitment: Altenburger and Rebol emphasized the importance of having ‘skin in the game’. For their first fund, they committed 10% of the capital themselves. They plan to continue this approach, ensuring alignment of interests with their investors.
- Strategic Investors: They aim to bring in strategic investors such as crypto exchanges and market makers, which can provide mutual benefits. For example, projects funded by Harbour Industrial Capital might find it easier to list on these exchanges, creating a symbiotic relationship.
- Other VCs and Fund of Funds: Harbour Industrial Capital plans to collaborate with other VC funds that may not specialize in Polkadot but are interested in its ecosystem. By becoming limited partners (LPs) in Harbour’s fund, these VCs can gain exposure to Polkadot’s deal flow.
- Rollover from Existing LPs: A significant portion of their first fund’s investors are expected to reinvest in the new fund, providing a strong initial capital base.
- Innovative Financial Products: They are exploring the creation of an Exchange Traded Note (ETN) to make the fund accessible to a wider range of investors, including retail investors, through regular brokerage accounts.
- Family Offices: A major focus will be on family offices, especially those in Asia, which have shown a keen interest in blockchain investments. Harbour Industrial Capital has already established connections with top family offices in Hong Kong, Japan, and the Middle East.
Polkadot Ecosystem Fund Deployment Strategy
Once the fund is raised, the deployment strategy will focus on four main types of investments:
- Token VC: Early-stage seed round investments in projects that are just beginning to gain traction.
- Launchpad: Supporting projects in launching their tokens through platforms like Polkadot’s Polkadot Launchpad.
- SAFT (Simple Agreement for Future Tokens): Allowing projects to raise capital without immediately issuing tokens, which can be beneficial for projects that do not require a native token.
- Strategic Investments: Attracting established web2 companies into the Polkadot ecosystem by coupling investments with commitments to build on Polkadot.
Bridging Traditional and Blockchain Investment
A unique aspect of Harbour Industrial Capital’s approach is their focus on bridging the gap between traditional finance and the blockchain world. Altenburger and Rebol, both with extensive backgrounds in traditional finance, have positioned their fund to appeal to non-crypto native investors. By making blockchain investments more accessible and less intimidating, they hope to attract a significant amount of new capital into the Polkadot ecosystem.
Conclusion
Harbour Industrial Capital’s plan to raise a $100 million ecosystem fund is a bold and strategic move aimed at strengthening the Polkadot ecosystem. By targeting a diverse range of investors and focusing on both early-stage projects and strategic partnerships, Altenburger and Rebol are setting the stage for significant growth and innovation within the Polkadot community. Their experience and deep connections within both traditional finance and the blockchain world make them well-positioned to achieve this ambitious goal.
