Thesis

Founder First

“We have invested in many “A” class founders, with “B” class products. We have never invested in “B” class founders with “A” class products.”

This advice that was shared to me when I was a younger entrepreneur has always stuck with me and formed a core thesis of EnigmaFund, as well as a general outlook on life.

We look for the most exceptional human beings creating wildly creative solutions with exceptional execution. The unstoppable and unreasonably relentless. It is there that we invest our capital of mindshare, sweat and funding.

Focus: Stage of Startups

There are 3 kinds of startups we look mainly focus on in WEB3:

  • Early product, pre-revenue

  • More mature product, some early revenue

  • Turnarounds/ being extorted or abused by bad actors/ contacted by the SEC or other similar agencies

In all these cases we focus on the founders and teams first. While we do occasionally step out of the three above-mentioned focuses, the only element that leads us there is the presence of exceptional people.

How we Work with Startups

We have 3 speeds:

  • Sunday Morning: 8 hours of advisory a month. 1 hour a week, and 4 hours ad-hoc. We mentor, give advice and help with negotiations and strategy. We also open up our network where appropriate and possible.

  • Let’s Move This Along: 5-10 hours of advisory and actual execution work a week. Mentorship, negotiation, assistance with sales and partnerships. Introductions throughout our network.

  • Moving Mountains: Whatever it takes. When there is no time to lose, and mammoth milestones ahead, we’re there to help you crush every step in the process. We leap in where angels fear to tread.

How and When we Invest Capital

30% of our fund is reserved for investing opportunistically in WEB3 into direct deals, secondary opportunities including vesting OTC tokens and assets.

70% of the fund invests in companies we accelerate. We initially invest a smaller cheque around 60 days into our engagement. This gives us time to understand if we are a good fit for the team and whether we can add substantial value.

We only invest into Web3 projects, with equity and a token allocation/ warrant or into a token offering. We do not invest into equity-only dealflow.

When we make that investment we take a warrant to invest a sum 4-8 times that size within a certain time period to deepen our commitment to the founders and the company.

Why we invest this way?

Venture capital is a challenging game. The fact is that the statistics weigh heavily against the investors and limited partners (LPs).

According to CBInsights 99% of VC investments fail.

With this in mind, we believe there is an opportunity to ensure a better outcome for startups and investors. By aligning incentives and giving startups the real help they need, we ensure less risk and better outcomes for everyone concerned.

What Typical Venture Investment Really Looks Like

A few actually get to M&A

Most don’t make enough

5 COMPANIES OUT OF 1,098 (less than 1%) become unicorns.

A Method To Cure the Madness

We work closely with the founders and invest in continued success with sweat and capital.

This approach protects our LPs, maximizes upside, and substantially de-risk the fund while helping founders assure higher chances for success across the board.