10T Holdings, a crypto-focused investment firm, has announced the launch of a new digital-asset startup investment fund, TenSquared Capital (10SQ). The fund aims to raise $200 million from investors and will back digital asset startups at various stages of growth. The fund has already secured commitments from limited partners of 10T for its upcoming investments. The move comes amid a slowdown in cryptocurrency investing, which has been hit by recent scandals and setbacks that have shaken the industry. Despite this, TenSquared Capital is determined to back startups that demonstrate viability and innovation.
Focus on Equity Investments Rather Than Token Investments
The 10SQ fund will be led by Stan Miroshnik, a co-founder and partner at 10T, who will join the company as CEO and managing partner. Elaine Co, a founding strategic advisor at StillBrook Capital, will also join the platform as a general partner. The firm plans to focus on equity investments rather than token investments, reflecting a greater caution among investors toward the use of crypto tokens that have been highly volatile and subject to regulatory scrutiny. The move follows a trend among venture firms, such as Sequoia Capital and Andreessen Horowitz, to become registered investment advisors.
10T Holdings, which has $1.2 billion in assets under management, has invested in companies like digital exchange Kraken and crypto wallet-maker Ledger, which have both raised funds at valuations of over $1 billion. The new venture has two investments planned, including one in a crypto wallet infrastructure startup expected to close in the coming months.
During a recent interview, Mysten Labs founder Evan Cheng claimed that the recent increase in AI funding has impeded funding for the crypto industry. Cheng explained that AI startups are now receiving a significant portion of the venture capital money that was previously earmarked for crypto. However, late-stage funding has become increasingly difficult for startups, with only the top-performing companies being able to receive support. “But once you get to the late Series A and Series B stage, the growth capital is hard to come by. It has to be an exceptional startup to get funded, unless you’re in the bubble of the excitement around generative AI right now, it’s going to be a lot harder for any startup to raise money.”