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Hack VC, Interview With Managing Partner Alex Pack

Hack VC Managing Partner Alex Pack
Hack VC Managing Partner Alex Pack

Hack VC, a venture capital firm focused on investing in web3 startups, recently closed a $150m fund. Following some weeks, Managing Partner Alex Pack joined us to answer our questions about his background, the firm, their overall strategy, and introduced the gems in their portfolio.

VCWire: Hi Alex, can you please tell us a bit more about you? What’s your background? 

I began my career as an analyst in Hong Kong, where I witnessed the global applications of crypto firsthand. Prior to Hack VC, I co-founded Dragonfly, a multi-billion Web3 investment firm with a presence in China and the US. My experience also includes roles as an investment director at Bain Capital, where I helped launch the firm’s Web3 investment practice, a senior advisor to Huobi, a leading crypto exchange in Asia, and a partner at AngelList. I’ve seeded hundreds of Web3 startups and have a deep passion for the transformative potential of blockchain technology.

VCWire: Can you introduce Hack VC? 

Hack VC is a venture capital firm that invests in early-stage web3 opportunities. We invest in blockchain infrastructure and web3-native companies with investments across 100+ companies and protocols. 

At Hack VC, we go beyond traditional investment approaches by leveraging our in-house tech platform, Hack.Labs. This platform facilitates institutional-grade network participation, allowing our team of blockchain engineers and quantitative researchers to provide liquidity, stake assets, make open-source contributions, and more. 

We recently announced our $150M opportunity fund, bringing our total AUM to ~$425M. 

VCWire: Which is your overall strategy (geo/amount/sectors)?

Our investment strategy is built on a research-driven approach focused on infrastructure. Within that focus, core categories include:

  • Web3 Infrastructure: Foundational protocols and networks building the pipes for the new Internet.  
  • Financial Infrastructure: Companies building the next generation of financial markets with smart contracts and blockchain technology, especially across DeFi. 
  • Web3 x AI: Companies building at the intersection of web3 and generative AI, one of the most important new categories of blockchain infrastructure. 

We have already invested approximately one-third of the fund in early-stage projects building the infrastructure necessary to make Web3 mainstream. We invest up to $10 million per project, typically leading deals and committing capital on-chain to support protocols at launch.

VCWire: Beyond capital, how do you support startups?  

With over a decade of experience in the crypto space, 20 unicorns, and supporting hundreds of companies, we have a deep understanding of the space and have cultivated a passionate talent pool and large network.

We are hyper-focused on crypto, ensure diligence, and provide hands-on support.

We’re also committed to fostering innovation and collaboration within the global developer community. We’ve established a robust community via initiatives like Hack.Summit, one of the world’s largest blockchain programmer events, attracting over 130,000 attendees from 150+ countries across various events to date.

VCWire: What do you like to see in founders?….And what don’t you like to see in them? I mean, is there something which impresses you at a first glance?    

When vetting founders, Hack VC’s approach is deeply rooted in recognizing that assessing individuals during a fundraising process is inherently challenging and often luck-driven. Similar to evaluating employees, we prioritize references, case studies, and a track record of past work.

In traditional venture capital, especially at the seed stage, the absence of a track record poses a significant challenge. While some VCs may be tempted to rely on intuition or their “innate ability” to recognize great founders, we acknowledge the danger in doing so, as it can lead to misguided decisions. 

However, in crypto, the landscape is entirely different. Here, almost everyone has a track record, even at the seed stage, thanks to the open-source nature of deep tech and a culture of building in public. 

I like to take a deep dive into what a founder is building and why, so I look at their code and architecture, and seek feedback from other experts. Additionally, I value a solid track record – whether it’s through GitHub commits or academic research papers. But it’s not just about what they’ve done; I’m also looking for honesty, integrity, and loyalty in founders. Avoiding bad traits is key. Lastly, I prioritize ventures in great markets, aligning with our thesis-driven approach. This ensures we’re investing in founders who not only have the skills but are also building in the right environment for success.

VCWire: Please, tell us a bit more about the portfolio. You can list five startups whose paths have made you particularly proud of.            

We were an early investor in a decentralized derivatives exchange that is now processing $100 million in daily volume, showcasing the demand for decentralized financial services.

Crusoe Cloud, a unicorn in our portfolio, is now valued at over a billion dollars, began as a clean energy bitcoin mining company and now explores AI applications. 

Additionally, we’re proud of our investments in infrastructure protocols like EigenLayer, a novel restaking and data availability mechanism for blockchain developers, and Berachain, a Cosmos-based Layer 1 protocol focusing on DeFi use cases. AltLayer, a roll-up-as-a-service investment, aims to address scalability issues in blockchain networks. These ventures demonstrate the diversity and potential of our portfolio in shaping the future of decentralized technology.

VCWire: Which sector/s would you bet 2 cents on in the next five years?  

I firmly believe that blockchain is at a pivotal moment. Despite the challenges and market fluctuations of the past year, I remain deeply committed to this space. Drawing from my decade-long experience as an institutional investor, including navigating multiple bear market cycles, I am convinced of the long-term potential of blockchain technology. At Hack VC, we are steadfast in our belief that the industry is moving towards positive and transparent change. We see genuine, meaningful use cases emerging, especially with the intersection of AI and web3, and it’s these applications that I would confidently place my 2 cents on for the future.

VCWire

14/03/2024