"VCs Typically Treat Community as an Afterthought; That's Wrong:" Soona Amhaz

In this week’s episode, I speak with Soona Amhaz of Volt Capital. Soona saw the value of crypto from very close when her family lost most of their savings after Lebanon’s currency crashed. She immediately told them to move their money to Bitcoin to protect themselves against further currency devaluation and currency controls.

She was working on a startup as an engineer while trying to learn about bitcoin and onboard others into the space, and she realized there was very little information about crypto. So she decided to start the newsletter called Token Daily which quickly became one of the most popular news sources about Bitcoin and ICOs back in 2017. The newsletter went from being a network of information to a network of people thanks to live events.

That’s how she got to meet great teams building interesting projects in crypto and see their progress before anyone else did. When she saw big funds come in and invest in the projects she also knew had potential, she realized she had an edge and decided to start her own fund, Volt Capital.

She raised $10 million for the fund earlier this year, backed by CMT Digital, Balaji Srinivasan, and investors from Union Square Ventures and Founders Fund. Her focus is on pre-seed and seed investments. In this interview, she talks about her investment thesis, how she evaluates founders and what it’s like to be a VC in a crypto bull market. She says that while public crypto markets are cooling off, private equity markets are more insulated. She’s not sure whether the current environment is the start of a bear market or a dip in a longer bull market, but regardless, she says the builders will keep building and the tech will keep moving forward.

The podcast was led by Camila Russo, and edited by Alp Gasimov. Transcript was edited by Owen Fernau and Dan Kahan.

🎙Listen to the interview in this week’s podcast episode here:

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Soona Amhaz: I guess we can go all the way back to college. I went to the University of Michigan. I studied at the School of Engineering there. And all of us spent way too much time on Reddit. We were all really into crypto. That was the main conversation topic at the time. And I guess, not much has changed in 2021. But the main debate was whether or not the government would even allow Bitcoin or crypto to happen. It was such an interesting community, they had their own vernacular.

And usually that's how you know that something is going to be paradigm shifting, or is really going to touch the mainstream in some way, is that there are these new made-up words. Everything from hodl to using proof of work and its own kind of culture around it. Because the mainstream language doesn’t sufficiently express what this thing is trying to do, right. So those were all indicators that were really interesting to me.

“...that's how you know that something is going to be paradigm shifting, or is really going to touch the mainstream in some way, is that there are these new made-up words. Everything from hodl to using proof of work and its own kind of culture around it.”

I find Bitcoin and crypto to be a courageous act to take on the financial system as it exists. And those types of movements and types of innovations are really binary. It either completely changes everything or goes to zero. So I graduated, I joined a startup called Alation. I was a 20th hire there. We scaled it out, now it has an over $1.2 billion valuation. And while I was there, I was doing valuation by day and crypto by night. So I was helping my colleagues get on-ramped into crypto, helping them set up wallets, and follow great projects in the space, because this was before there were really good outlets.

And now there are so many to choose from. They're really quality. But at the time, there was a real dearth. It was like Twitter, CoinDesk, Reddit, and it was really on the reader, the user, to navigate for themselves and figure out what the source of truth was. So I started a newsletter called Token Daily that had really humble beginnings. And it was simply a way to figure out what was going on in the space and to figure out up from down left from right, frankly. And it was one of the earliest newsletters, so we grew like wildfire. I didn't spend anything on marketing.

And soon enough, projects were proactively coming to me to be featured. So Lolli launched with us, Compound’s initial launch was with us as well. And we grew this great readership base and had quality information that we would curate. And as with your work, it really takes a lot of effort to create a trusted source of truth in the crypto space.

So at some point, I remember thinking, well, look, this reader base needs to meet each other and needs to know they aren't the only ones behind the screen reading Token Daily. So we started hosting on and offline events. And soon enough, Token Daily went from a network of information to a network of people. And that is very powerful. Because all of a sudden it went from a one-sided push to read, to get some feedback for myself, and it transformed into this community where it organically was tapping into this network effect, people were talking to each other about job opportunities, co-launching companies together. And it became this living breathing thing that no longer needed my moderation or assistance and just grew on its own. And at that point, I started seeing incredible companies and helped them build out their teams. They'd want product feedback, and that really started planting the seeds for launching Volt Capital.

“I remember thinking, well, look, this reader base needs to meet each other and needs to know they aren't the only ones behind the screen reading Token Daily. So we started hosting on and offline events. And soon enough, Token Daily went from a network of information to a network of people. And that is very powerful.”

Bitcoin in Lebanon

Camila Russo: Oh, wow, so interesting. I really want to talk about how you built this community. But first, I want to go back to more on your background on why you found crypto so interesting and so useful. So I understand you also onboarded your own family to use crypto. So if you can share that story as well?

SA: Yeah, sure thing. So people who know me know that I'm really motivated by two things. One, is democratizing access and two, is integrity of information. That's why I joined Alation, it's a data cataloging company that quite literally allows you to source data, and understands the lineage of it, its hygiene, etc. And it's also why I was interested in Bitcoin. It was really this combination of the two things, and I think it did it really powerfully.

In addition to that, I grew up where money was really tight. So I always had this very fundamental understanding of the inequalities in financial systems that we use today. This became more pronounced only recently, when the Lebanese Lira lost the peg to the dollar, which it's retained for decades now. No one in Lebanon, at least from the civilian standpoint, saw this coming. And I'm Lebanese, my extended family is all Lebanese, and they went from having their wealth stored in banks, in cash, and overnight lost 80% of it. And so, that was staggering, like it really destroyed their quality of life, continues to do so.

And I remember telling my mom, well, you know, you can send them Bitcoin and she responded with well, like that has go through the banks, the banks have capital controls, they won't be able to use it or store it, or if they do end up getting it, they’ll only have crumbs left. And my response is that it doesn't have to go through the banks, actually, this is why we're doing this entire thing. So I think that moment was really when it clicked for my family that there's this real substantive use case outside of speculation, outside of the casino that mainstream media paints crypto to be.

“And I remember telling my mom, well, you know, you can send them Bitcoin and she responded with well, like that has go through the banks, the banks have capital controls, they won't be able to use it or store it, or if they do end up getting it, they’ll only have crumbs left. And my response is that it doesn't have to go through the banks, actually, this is why we're doing this entire thing.”

CR: I mean, that's such an inspiring story. What year was this just to get a framing?

SA: Oh, for Lebanon's Lira debacle, that was just as recent as a couple years ago and is still ongoing.

CR: Right. And so how has Bitcoin helped your family there? Are they able to transfer their money to Bitcoin from the Lira? How are they using it?

[ … ]

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