Zima Red ep 94: Ian Lee

Syndicate Protocol: The Investment Protocol To Rule Them All

Primer: Ian Lee is on a mission to enable communities to create DAOs for investment and to build social networks on top of them. In this episode of the Zima Red Podcast, he shares his backstory and how he came to found Syndicate Protocol with Will Papper, his co-founder.

Background

• Been in crypto for 7 years

• Prior to that, he was in the aerospace and automotive industry for a decade

• Got into crypto because he joined Citi Ventures (Venture arm of Citigroup) and was tasked to research about Bitcoin

• Have been studying open software systems for almost a decade before learning about Bitcoin in 2014

“I immediately realized that this thing [Bitcoin] was not a coin, but in fact, an open FinTech stack. And once I realized that, I immediately became enthralled by the potential of it and started championing within Citigroup and Citi Ventures that we should be investing in this technology much more heavily than people initially imagined.”

- Ian Lee

• Became head of Bitcoin, crypto, and blockchain at the bank from 2014 to 2017

• In 2015, he helped IDEO, a global design and innovation company, to start a crypto lab called IDEO CoLab

• Left Citi Ventures and joined IDEO CoLab in 2017

• IDEO CoLab spun out IDEO CoLab Ventures, which invests and incubates crypto startups. Was the managing partner there for 3 years

• During COVID/early 2020, when deal flow dwindled, he started brushing up on his Solidity skills to learn about new primitives

• In summer 2020, he arrived at a primitive for decentralized investing with Will Papper, his co-founder

• In early 2021, he and his co-founder started Syndicate, a decentralized investing protocol and social network that enables communities to create investing DAOs on the protocol

Looking Into Bitcoin

• Was a really weird experience and journey for him

• Citigroup was looking at the implications of decentralized ledger on government and fiat currencies in late 2013

• Central banks were asking Citigroup what they thought about Bitcoin. Hence, research projects were set up for it

• When he first joined Citigroup, his manager tasked him to research Bitcoin and understand it from a developer and entrepreneur perspective

• Went down the rabbit hole and it clicked for him because he has been in the open software space for years

• Started to become the Bitcoin person in the bank. Was met with healthy skepticism

• In 2015, the institutional perception towards Bitcoin started to shift

• Was appointed to lead the bank’s strategies and initiatives in the Bitcoin and blockchain space

• By the time he left Citi Ventures, they were one of the most active institutions investing in this space, alongside Goldman and Google

Helping Out With IDEO

• IDEO had been working closely with Fidelity on The Future of Money, which is a summer-long program at Harvard

• The main person leading the program was Sean Belka, a close friend of his

• In 2015, Fidelity, Nasdaq, Citigroup, IDEO, and Harvard launched a collaborative research lab around the future of money and decentralization

• Realized how difficult it was to build decentralized apps on top of Bitcoin

• Created IDEO CoLabs in the fall of 2015 as a research lab. It has evolved into an investor/venture builder in crypto

• Met his co-founder, Will Papper, at IDEO. Will was one of the research fellows in the lab 4 years ago

Meeting Will Papper

• IDEO CoLab started out as a research lab that invites high potential fellows from universities, graduate programs, PhD programs, and companies like Google and Facebook

• Invitees will take a 1-2 week sabbatical to come work with IDEO CoLab on decentralization stuff

• Will Papper was one of the fellows that was invited. At that time, Will had taken a leave from Stanford to work on future of work applications in crypto

• He was researching on decentralized social networks and how it could be used to unlock future of work opportunities. Will joined the project and they connected

• Both of them ended up concluding that the primary application of decentralized social network was for the purpose of investing

• As they got more involved in DeFi in 2019/2020, they started seeing how these primitives (e.g. Uniswap, Balancer) could be mashed together with social networking to create an investing social network that is powered by DAOs

• This coalesced into Syndicate

When Did They Move Forward With Syndicate?

• Started working on the primitives for it in summer last year

• Spoke with Ash Egan, Jesse Walden, and the team at IDEO to refine their go-to market, product, legal considerations, etc.

• Formally spun it out in January 2021

• Did a small seed round in March

• Recently closed their Series A, which was led by a16z and others

Syndicate Protocol

• A decentralized investing protocol and social network

• It enables any community to create a DAO for the purpose of investing in itself, others, etc.

• Protocol is already live on Ethereum Mainnet

• Currently building infrastructure, tools, services, and even a social networking platform for the community to coordinate their investment activities

• Provides legal tools and services to ensure that investing DAOs on Syndicate are able to protect themselves and their members and be compliant with securities laws

“We fundamentally believe that investing natively in Web3, is going to look radically different than how investing today works in Web2.”

- Ian Lee

What Does Native Web3 Investing Look Like?

• Believes that crypto is making capital very abundant. We will move from capital allocators to capital networks

• When someone comes up with an idea, they can turn into a startup and be funded immediately. They do not need to pitch in a traditional kind of investing way

• Investment vehicles/capital networks will be dynamic and superfluid — they may pop up, spin out, and spin down almost instantly

• Accounting and reporting can be automated as all investing activities happen on-chain and there are crypto native accounting tools available

How Does Investing Using Syndicate Differ VS Traditional Ways Of Investing?

• Philosophically, crypto is making capital abundant. Builders, developers, and founders no longer have a problem of accessing capital

• Capital is no longer an edge. Hence, the shift in focus to contributions

• In traditional investing, investors generally contribute access to distribution and branding. This is still important and will still play a role in the Web3 native world

• Traditional investors need to adapt and transform themselves into crypto native investors who participate in governance

• Will be very challenging for traditional venture firms which are small in size. Will need to use infrastructure like Syndicate to enable scout networks at scale to interconnect with people in various communities

• Startups/projects are natively forming inside Web3 communities. Will see more of this trend increasing

Social Aspects Of Syndicate

• Moving from Web2 to Web3, what you do matters more than what you say, as it can be verified on-chain

• DAOs want that transparency so as to build trust within their community

• Transparency exists on a spectrum — everything on-chain and in public to pseudoanonymous through the use of ZK-proofs

• Syndicate is working on the full spectrum of transparency

How Does He Feel When He’s Building This Everyday?

• Found it really exciting and fun

• As they go deeper, it opens up more problems and opportunities in the Web3 space

• Want to be a part of making the world more equitable and democratic from an investing perspective

• They are very intentional about who they are bringing in to their community

If He Had Unlimited Resources, What Would He Do?

• Fund the development of things that should be built on both in parallel and on a faster timeline than a centralized startup/team could build on its own

• Have identified many technical pieces of infrastructure that needs to be built. Would like to accelerate the time to market of those solutions

• Would want to fund other developers, startups, and teams in the ecosystem

Single Favourite NFT

• Party Round created a PFP that looked like a CryptoPunk for him

• NFTs can be a very personal thing and have a lot of value in that way

Most Controversial Thought On NFTs

• The emergent organic nature of bitcoin/crypto/NFTs/DAOs are one of the most beautiful properties of open sourced development and open source software

• However, it can also lead to limiting ways to think about something, which limits the ways in which they are utilized, applied, or even things that are developed on them

If He Could Improve One Thing In The Space

• Wish that there was a mobile-native way to interact with DApps

Who Is Someone He Look Up To And Why

• Vitalik for getting Ethereum off the ground and what he has achieved

• Stani and Hayden, for what they have done with Aave and Uniswap, respectively

• Also inspired by communities like Friends With Benefits and Seed Club

“I am really inspired by those communities that come together, like on shared values, shared intent, shared hopes and dreams, and they just like, they're just doing it together as a community and like, that is so cool.”

- Ian Lee

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