Katie Haun's venture capital firm, Haun Ventures, raised $1.5 billion for a crypto-focused fund at a time when the crypto industry faced a steep downturn. The firm now plans to invest in digital tokens and traditional equity, and is currently emphasizing startup investments, according to an Aug. 2 Yahoo Finance report.
“She’s not an engineer, she's not a tinkerer, and she's not a builder,” Fred Wilson, cofounder of Union Square Ventures, said in the report. “She's one of the best networkers I've ever worked with. She can get meetings with anybody.”
This past April, Haun and her staff met with approximately 70 limited partnerships and founders of Haun's portfolio businesses to convince the backers of her $1.5 billion company that everything was going according to plan, even though the crypto business was struggling in the wake of several high-profile failures in the industry in the previous year, according to Yahoo Finance.
To reassure investors, renowned dealmaker Sam Rosenblum referenced the Gartner Hype Cycle, a tool used to evaluate technological trends, to demonstrate that the most productive construction happens during troughs in a cycle, according to the release.
Although all industries experience highs and lows, the fall of cryptocurrency in 2022 was far steeper than most investors anticipated. The decline was worsened by the stunning collapse of several of the top projects in the industry, Yahoo Finance reported. In only a few months, a wild bull market that saw Bitcoin reach $69,000 turned sour; well-known enterprises like Terra failed; and the venture capital industry was severely harmed by rising interest rates.
In November, market leader FTX was exposed as a major fraud, prompting U.S. officials launch an aggressive campaign of enforcement of the industry, according to the article.
As for Haun, who had advanced from a Supreme Court clerkship to a prominent Justice Department position to the top of the venture capital industry, the collapse of cryptocurrency threatened to be the first significant setback to her quick professional climb and meticulously built reputation, Yahoo Finance said.
By the time Haun had raised $1.5 billion - a sizable sum even for Silicon Valley venture capitalists - many opportunities were gone. A fundraising document showed Haun promoted a deployment timeframe of roughly two years while soliciting the money, but that timetable was no longer relevant, according to Yahoo Finance.
Haun Ventures now expects to take closer to three years to spend its capital, according to the article. The company had deployed around 30% of its capital by mid-June in about two dozen positions, including stakes in publicly traded, liquid tokens.
As more investors turned to the more popular area of A.I., venture capital funding for cryptocurrency projects dropped to $2.3 billion in the second quarter of 2023, a 70% decrease from the same period in 2022. In real time, the playbook for crypto ventures was being revised, Yahoo Finance reported.
Although Haun must perfect an investment strategy during a "black-swan event," the same challenge faced by other venture capitalists, she also must contend with possibly unfair scrutiny as a woman in a industry dominated by men, Yahoo Finance noted. Critics have suggested that Haun's government experience may have made her an authority on regulation, but she doesn't have extensive experience in technology or deal-making. Her supporters say such concerns are unfounded.
