Tony Cheng is a General Partner of Foresight Ventures, a firm dedicated to backing the disruptive innovation of blockchain for the next few decades. They manage multiple funds: a VC fund, an actively-managed secondary fund, a multi-strategy FOF, and a private market secondary fund, with AUM exceeding $400 million.
The team is composed of veterans from top financial and technology companies like Sequoia
Capital, Google, Bitmain and many others.
You initially started as a consultant to Sequoia Capital China, what type of investments were you making in these early days?
I started my career as a consultant at Oliver Wyman where I advised fintech companies and financial institutions on strategy and go-to-market strategy. I later joined Sequoia Capital China as an investor specializing in fintech related companies. I invested in early-stage up to later-stage public companies. Early-stage investing was always more interesting to me as it was focused on solving problems in exciting new markets and I was able to speak to so many interesting entrepreneurs tackling these problems.
When did you become so bullish on Web3 and what inspired the excitement?
I became super bullish on Web3 during Defi Summer 2021 largely due to seeing Defi as the biggest on-chain application to date. There were tons of new and exciting ways to trade, invest and earn on-chain. Given the upbeat markets, everybody was rushing in with excitement. I met many builders during this time and the excitement and passion felt like a new renaissance.
What type of Web3 applications are you most interested in investing in?
I love consumer applications: wallets, DeFi, games, bridges, anything that needs to attract retail users to scale is something i am interested in. Crypto’s next phase is to attract the everyday user into the ecosystem, and investing in these applications/protocols is what interests me most.
You’ve previously shared your belief that the next crypto bull run will showcase new utilities functionalities for NFTs. What are utilities that you anticipate we will see more of in NFTs?
I think NFT’s in gaming and identity are going to be the most important utilities in the next cycle. Gaming I think has been covered at length by many, the utility of these gaming NFTs will be important for gaming interoperability and ownership. But I think a bigger use case for NFTs would be identity. These NFTs could be your social data, credit data, or any other type of personal information that is portable, composable, and self-custodied. This could change the model of how our personal data is collected, stored and monetized. We are looking at a lot of projects in the space that are tackling the identity problem.
On the surface, Foresight Ventures’ accelerator Foresight X seems to be modeled loosely on YCombinator, could you share some insights on what sets this accelerator apart?
I think a lot of accelerators are largely modeled after YC because YC is probably the most successful accelerator in internet history. But what we are trying to do at Foresight X is a bit different. At Foresight X, we are leveraging our entire ecosystem to support early stage projects. We are not only connecting them with our network of mentors, portfolio companies, media outlets, etc, we are more interested in actually helping them realize their vision by being one of the most hands-on partners in the industry. We pride ourselves on being able to work closely as a resource with the project team, supporting the team on whatever they need, managing liaising of internal and external resources with the full support of the entire ecosystem. We are extremely selective as we dedicate a lot of resources internally to help the selected teams. Our ecosystem grew to the size we have today given our team of elite builders and their experience is what we leverage to help new founders navigate the space.
What do you look for in founders that apply to this accelerator or that Foresight Ventures is looking to invest in?
We look for a few things:
- Long-termism which is persistence and conviction in the space, willing to build for the long-term.
- Creativity which is extremely important as founders are tackling very new problems in a fast-changing industry
- Execution driven which is needed to quickly iterate and continually improve the product in any new market.
Could you share some insight on how VCs in China differ from US focused VC funds?
I think China-based VCs tend to invest more in consumer applications given more familiarity and success with this business model whereas US based funds on average spend more time on enterprise applications. Obviously in crypto there is less of a difference given all sectors are still in their very early stages. But generally I feel China based crypto funds are more risk averse given the tougher fundraising and regulatory environment.
Foresight Ventures has a tokenomics design team, market makers, wallets, etc. What are some of the ideas behind building out these in-house tools?
Having an in-house team is important mainly from a speed perspective. We want to be able to provide access to these resources to our portfolios and having ownership of these tools allows us to quickly tailor solutions to the users. It also costs less in terms of overall costs as we are able to internalize a certain portion of support costs.
Why do you personally have so much conviction in digital assets?
I think of crypto as a paradigm changing asset class because of the utility being built on it by so many smart minds. As a long-time venture investor, seeing so many people jump into this space and bring so many new ideas to fruition shows consensus being built around this sector. After this recent bull market, the crypto industry, though still very early, has already seen leaps and bounds in growth on actual utility compared to 2018. It will only get better going forward and I have a front row seat.
Is there anything else that you would like to share about Foresight Ventures?
We have a very long-term vision for Foresight Ventures, we want to build a global platform and ecosystem that can be a long-term partner for our portfolio projects. We are differentiated from other venture funds through our hands-on approach and large ecosystem that can generate significant synergies throughout projects’ lifecycle. We are always investing!
Thank you for the great interview, I look forward to following your investment portfolio, readers who wish to learn more should visit Foresight Ventures.