Alt Asset Allocation Ep 67: NFT Investing in 2022 with Les Borsai of Wave Financial
Primer: From the entertainment industry to investing in early seed stage crypto companies. Les Borsai brings with him a diverse background and skill set. In this episode of Alt Asset Allocation, he speaks with host Ben Lakoff on his involvement with the NFT scene and his thoughts on the sector.
Background
Background in entertainment
Ran away from home, making a living by borrowing warehouses and throwing parties
Got hired by a concert promotion company
Stayed in the music business and saw it change
In 2013, he found crypto and convinced Chris Larsen to let him be an advisor to Ripple
Participated in the Ethereum pre-sale
First NFT purchase was CryptoPunks, followed by CryptoKitties
State Of The NFT Market Right Now
Yuga Labs, the company behind Bored Apes, acquired Larva Labs
Fortunate to buy Bored Apes as it is the gift that keeps giving
Where Are Our Blind Spots In This Utopian Vision Of Crypto Eating The World?
Don’t think that the blind spots are actually blind spots
Knows that there are volatility issues, regulatory issues, and market issues
Has become more of an optimist as he gets older
Wave Financial
Wanted to do something completely different
As a manager, he had to think about finance for an artist and what their future looks like
Partnered with David Siemer to start Wave Financial
Wave is a venture fund that does early seed stage investment in blockchain and crypto companies
Most recently, they launched their NFT fund
The Investment Style Of Their NFT Fund
70% collectibles and 30% equities
Likes projects that are wacky
Speaking To Investors
He does not pitch to people to invest
He just wants to educate them
His curiosity ends up energizing people to be involved and invest
“When I'm talking to someone who may or may not want to invest, it's not a pitch for me. I really don't give a shit, which is counterintuitive. I just want to educate them with what I know and tell them I may be right, I may be wrong, but this is the way I see it.”
- Les Borsai
How Does He Determine What Collectibles To Invest In?
His firm consists of people from the venture space
They look for strong teams with a thoughtful roadmap with good engineers
Collectibles are something that they want to hold over the long-term
“Being part of the community and connecting with the people that are creating what you're drawn to is the way we really look at projects.”
- Les Borsai
For PFPs, What Sort Of Style Or Aesthetic Are They Drawn To?
There will always be something that you are drawn to. He bought an Azuki that looked like him
For the NFT fund, they are more methodical — understand the roadmap, functionality, etc.
Currently into Gala Games right now
Music And NFTs
Wanted to do things that had nothing to do with the way music businesses licenses music
Became an advisor for Aavegotchi
Instrumental in getting Lil Pump into Aavegotchi
Aavegotchi raffled off Lil Pump wearables
Thoughts On Regulations
What concerns him is that regulators are still thinking about layer ones and stablecoins
A lot of regulation is about consumer protection
However, when the SEC gets involved, the people that get hurt are the consumers in most cases
Needs to have clear regulatory frameworks
The executive order was more positive than people expected it to be
What Is He Obsessed With Right Now?
Have been buying CrypToadz
Wants to buy more World of Women
Recently bought AlphaSkullz Genesis Force, Astro Girls, Ghost Frens, and Hero Galaxy: Heroes for fun
What he personally buys is separate from what the fund buys
Are They Worried About People Monitoring Their Fund Address And Frontrunning Them?
Some of their larger investments are into companies that they believe in
They are not an NFT trading fund. They hold their NFTs over the long haul
“I have art at home. And I don't go out and sell my art every single day. Hey guys, here's a Richard Prince, let's sell that today. You know, so it's like, why would we treat this any differently?”
- Les Borsai
Have also sold some of their holdings before
People trying to frontrun them is outside of their control
Their advantage is that they are early and deep into the space
What Advice Does He Give To Someone Who Wants To Invest In NFTs For The First Time?
They have to know their risk tolerance and not to spend more than they could afford to
Do the research and be part of the community
For example, if someone is interested in fashion, they could key in “fashion NFT” into the Twitter search bar. They would then stumble upon Gucci NFT, read up on it, and learn from there
His 14 year old nephew is part of the Smol Brains NFT community on Arbitrum. He managed to get himself connected with the community
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