Interview with Alexander Lenz | SMAPE Capital
Interview with Alexander Lenz | SMAPE Capital
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Interview with Alexander Lenz
- DezentralizedFinance.com sat down with Alexander Lenz, General Partner and COO of SMAPE Capital to discuss the latest developments & updates from SMAPE Capital and the future of the Web3 venture capital ecosystem.
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We are an interdisciplinary team, based out of Europe, investing without global limits.
- What is SMAPE Capital: SMAPE Capital is a German web3, token-first Venture Capital fund. SMAPE invests globally in projects using blockchain technology that solve interoperability issues, allow for scalability, enhance user experience, foster mass adoption of use cases, and develop novel token use cases. In addition to their network, venture partners and advisors, SMAPE uses a data-driven approach through a proprietary and exclusive web screening engine to identify leading blockchain projects and industry trends early on.
- Don´t miss any Web3 insights. Get involved in DeFi & NFTs & Web3 for free!
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DezentralizedFinance: Kindly introduce yourself and describe your crypto journey and share the moment/reasons why SMAPE Capital was founded.
- Alexander Lenz:
- Thank you, Julian, for the invitation! I am Alex, General Partner and COO at SMAPE. I have been introduced to crypto in 2017 by one of our co-founding partners, Christian Niedermüller, and have been following the market and its trends since then.
- Originally, I have a traditional finance background and spent more than 15 years in various roles in international banking groups, advising international clients in transactions and strategic business transformations during my time at a Big4 company, and – just before joining SMAPE full-time –managing the investments of a renown US PE firm in Europe.
- What fascinates me about DLT is the re-distribution of governance, oversight, and control to a community rather than being exercised by an individual. Blockchain technology can immediately achieve trust through validation by the network, provide access to certain infrastructure, services, and communities for all people at no to minimal cost, and eliminate single points of failure for common infrastructure that would otherwise be deemed “systemically critical”. We at SMAPE Capital and I personally want to enable projects to thrive in this very spirit.
- Originally, SMAPE was founded as an Investment Collective that pooled private capital to invest into pre-seed and seed rounds of web3-native startups and their tokens. Investing in such projects became harder and harder as individuals, and by pooling capital we could secure allocations in high-potential projects. Throughout late 2021 we deployed ~€1M in private funds and generated a ~3x MOIC to date (despite the recent market downturn).
- In the course of this year, we set up our first fund, also allowing semi/professional investors to join in on our investment strategy. We are registered with the BaFin (German Financial Market Supervisory Authority) and are working together with industry leaders in Germany and our partners globally.
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DezentralizedFinance: Describe the SMAPE Capital use case and the value that you are offering to DeFi, NFT and Web3 projects (next to funding)? Please tell us more about your data-driven approach to identifying projects and your screening engine.
- Alexander Lenz:
- We are a web3, token-first fund with extensive expertise in token design, token utility and token value accrual mechanisms. The team is composed of seasoned investors and industry thought leaders with a combined experience of more than 45 years in this space.
- Next to token design, we can offer in-house regulatory know-how and advice for web3 business models and token cases. This sets us apart from most of our peers and is very relevant from a general project risk perspective.
- Supplemented by our network of venture partners and advisors, we can provide relevant expertise and experience in all stages of a project – and we’re doing this willingly and with pleasure for all founders that we are supporting on their journey.
- Our network is also the backbone for identifying projects and securing an allocation in pre-seed/seed stage funding rounds. In addition, we have developed a proprietary and exclusive web screening tool together with one of our technical advisors that allow us to search for new projects and identify industry trends around the clock.
- We are getting ~800-1000 hits for potential investment opportunities or new projects on a daily basis. This raw data feed is then filtered, sorted, and processed. A handpicked selection of projects is then shortlisted and we start our rigorous due diligence process together with the founders.
- I think this is quite unique in the market and gives us a significant advantage in our deal flow and the selection of our targets.
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DezentralizedFinance: What is your investment approach? What are you doing better/differently compared to your Crypto VC peer group?
- Alexander Lenz:
- Our focus is on early-stage (pre-seed/seed) opportunities and selectively existing, but undervalued projects. We strongly believe in infrastructure projects as technology adoption drivers with the highest anticipated value accrual. Other sectors that we selectively invest in are NFT-based DApps, DAOs, selectively DeFi infrastructure and applications, and Data and AI applications.
- We are platform-agnostic in our investments and do not want to limit and bind ourselves to one particular ecosystem. Our latest investment narrative can be found on our Medium page.
- I believe that our combined experience, agility, and investment narrative paired with our access to early-stage deal flow via our partner T1 funds, accelerators, incubators and our in-house screening engine provides the perfect platform for investors seeking exposure to DLT projects. The due diligence that we exercise on all our projects ensures the most transparent assessment before an investment – and we have published these standards as well in an article on how to assess digital assets projects.
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DezentralizedFinance: What is your most interesting target industry (Web3, DeFi, OpenFinance, NFT, Metaverse, Gamification, etc.) What does your perfect crypto project investment look like? Share some of your current portfolio projects.
- Alexander Lenz:
- Because DLT as a whole is still in its early stages, projects that are building groundbreaking infrastructure will probably be the most interesting investments in the years to come. In parallel, interoperability solutions and “bridges” will help to shape a consistent and lasting ecosystem on which relevant DApps can be built that will finally find their way into the mass market.
- Certainly, industries like Gaming, DeFi, and applications in the Metaverse have embraced these developments early on, but have also suffered setbacks because of limited economic use cases. We think that e.g., NFTs will find broader applications beyond arts and collectibles soon. NFTs can endow their owners with rights and privileges that establish true web3 identities while also having a real value that can be monetized – e.g., medical data.
- Our previous investments represent a very good cross-section of what we find interesting and what we think has the potential to thrive which spans from infrastructure to play-to-earn gaming applications.
- Don´t miss any Web3 insights. Get involved in DeFi & NFTs & Web3 for free!
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DezentralizedFinance: Is now a good time to invest?
- Alexander Lenz:
- The current market offers anti-cyclical, bear market investment opportunities at “normalized” valuations (following the highs of last year). We see this as the perfect time to position ourselves for the next bull run and compile a strong, resilient, and performant portfolio.
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DezentralizedFinance: Can you introduce your team to the readers? What relevant experience do they have?
- Alexander Lenz:
- SMAPE’s core team consists of four people: Astrid Woollard, GP/CIO, Christian Niedermüller, GP (part-time), Moritz Müller, Senior Investment Analyst, and myself, GP/COO.
- We have an extensive network of advisors and venture partners that also have been founding partners of SMAPE when we’ve been an Investment Collective. Our combined experience enables us to diligently and efficiently invest in this industry.
- Astrid is spearheading our Research & Investments. She has been in the industry for more than 10 years and is a crypto native. Prior to SMAPE, Astrid was the Managing Partner & Head of Research at Scytale Ventures. She’s also a Startup Mentor at several incubators/accelerators, such as OutlierVentures.
- Christian covers Fund Relations. He is engaged in SMAPE part-time in addition to his CEO role with Blocktrade. He has more than 15 years of experience in the finance industry and more than 6 years in the digital asset industry. For example, he set up and managed the Fintech Advisory Board of the Austrian Finance Ministry, co-Founded DAAA (Digital Asset Association Austria) where he still serves as a board member, and is an active startup mentor at Outlier Ventures’ blockchain programs.
- Moritz is supporting Astrid on Research & Investments. Moritz is also a crypto veteran and expert on token designs, decentralized governance mechanisms, and smart contract-based business logic. Initially, he mined Ethereum but quickly developed a deep interest in decentralized ecosystems and their potential implications of them on existing markets.
- I think we are a perfect combination of deep, technical crypto know-how and vast experience in diligence and investments – and the team spirit is amazing (smiles!).
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DezentralizedFinance: Please share your mid- and long-term roadmap with our audience.
- Alexander Lenz:
- We expect the current market conditions to last another 12-18 months at least. Economic recovery can only happen if there is geopolitical peace and security. The current macro-economic challenges will need to be addressed by the central banks in the short run. Hopefully thereafter, economies can breathe and start to prosper again.
- Now, all of this is not exactly a glorious outlook for the next 1,5-2 years – especially not for crypto which has been bashed so very hard and has been shaken by so many scandals (see Terra/Luna, break-in of 3AC, FTX bankruptcy, etc.).
- However, a fundamental difference to previous market downturns is the current continuous and constant adoption of DLT – by big brands and a wide range of sectors such as sports, gaming, digital fashion, digital collectibles and more. Also, even conservative economic sectors, such as healthcare, are now delving deeply into tokenized economies (e.g., Pfizer & VitaDAO).
- This leaves us very optimistic for the next cycle where we expect to see a stable ecosystem of reliable and resilient infrastructure, relevant applications that can easily be adopted by the masses, and a shift in both mindset and factual application toward web3’s core characteristics: decentralization, trust through blockchain technology, and tokenized economies.
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DezentralizedFinance: What are you looking for at the moment (new seed projects, funding, talent, network, development, community building, etc.)?
- Alexander Lenz:
- Of course, we are always on the lookout for the next project – but that’s already part of our daily job and routine – and we’re very happy with the team, the setup, the atmosphere, spirit, and morale.
- Currently, we are looking to build out the SMAPE brand even further, by demonstrating our capabilities and how we can add value for our partners. Connecting with industry thought leaders and developing new concepts is certainly something that we are keen to do. For example, we’re currently working on a valuation framework for tokenized economies.
- It is also very important to us to involve our investors as best as possible, share our vision, thoughts, and considerations with them, and provide them with relevant access to a community.
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DezentralizedFinance: How to get in contact with your team and your community?
- Alexander Lenz:
- You can contact us via [welcome@smape.capital], or visit us on our website https://smape.capital where also all our social media channels (LinkedIn, Medium, Twitter) are linked.
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DezentralizedFinance: Thank you for your time and the great talk, it was really fun. Hopefully, we can repeat the interview in the future.
- Alexander Lenz:
- You are welcome, thank you for the great chat, and stay safe.
- Find more valuable interviews at DezentralizedFinance.com in our category Interviews.
- RISK DISCLAIMER: All information presented above is meant for informational purposes only and should not be treated as financial, legal, or tax advice. This article’s content solely reflects the opinion of the writer, who is not a financial advisor. Do your own research before you purchase cryptocurrencies. Any cryptocurrency can go down in value, also to zero. Holding cryptocurrencies is very risky.
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