Blockchain VC Shima Capital debuts with $200M Web3 fund

Yida Gao announces a new project to support pre-seed and seed stage companies in the crypto world

By Shashank Bhardwaj

Image: Shutterstock

Shima Capital has announced the launch of its debut fund, Shima Capital Fund I. Shima Capital is a global venture capital firm that invests in early-stage blockchain companies throughout the market cycle. According to reports, the first fund raised $200 million. The fund will be used to help new digital asset companies get started. Dragonfly Capital, Bill Ackman, Animoca, OKex, Mirana Ventures, Republic, Andrew Yang, and other prominent crypto investors contributed to the fund. According to a statement made by Yida Gao, founder and managing partner of Shima Capital,

"There's been crypto funds that have grown and ballooned in size to billions of dollars of assets under management…It’s hard for them to invest in the earliest stages of Web3 founders...We think that's an area that we can add the most value."

He went on to say that more than half of Shima's team is dedicated to post-investment operational support services. Among these services are engineer recruitment, community marketing, and token design, among others. The inaugural fund will primarily invest in pre-seed and seed stage companies. It plans to invest between $500,000 and $2 million in pre-seed funding for crypto and blockchain startups at the intersection of consumer products, decentralised infrastructure, and futuristic blockchain technology. Explaining the idea behind the check sizes, Gao said, "We want to have that margin of safety in our investments."

Gao will oversee the fund's investment strategy. He was previously the Co-Founder and General Partner of Divergence Digital Currency. It is a $100 million or more crypto hedge fund that has grown more than 15 times since its inception in 2017. Gao has also stated that the fund will invest in layer-1 and layer-2 technology, as well as projects focusing on security and the development of zero-knowledge proofs. In his own words,

"As crypto-focused VC's continue to raise massive billion dollar plus funds, we identified a pocket of opportunity to support Web3 founders with their first institutional checks that are considered too small for other Tier 1 investors…We also observed that early-stage funds usually do not provide extensive value-adds for founders, given limited resources. At Shima, we take the opposite approach and spend the necessary resources to provide our portfolio companies with surgical support typically found only with larger funds."

Gao believes that focusing on the earliest funding rounds and providing a full suite of value-adds will 'yield strong returns for LPs and align incentives the most with founders.' He is joined by a group of investors and professionals with a track record of sourcing talent and driving successful investments at some of the world's most successful technology companies. Shima Capital's executive team includes a former Ripple Labs DeFi head, a former venture partner at Old Fashion Research, and a former Atomic VC head of talent.

Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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