Hack VC Closes $150M Venture Fund I, Bringing AUM to $425M

By Alex Pack and Ed Roman, Co-Founders and Managing Partners, Hack VC

We announced today that we have raised $150M for our first venture fund. We raised this fund opportunistically, in a bear market, as a natural extension of our initial $200M seed fund. Collectively, this fund gives Hack VC $350M in aggregate commitments across the firm’s first two funds, and brings our total assets under management to approximately $425M. The fund is actively investing in early-stage web3 infrastructure, from protocols to next-gen DeFi and real-world asset tokenization to projects at the intersection of web3 and AI. We deploy anywhere from a few hundred thousand dollars into solo founders or incubations to several millions of dollars into projects in which we have conviction. We also set aside capital to support our protocols on-chain.

While this fund is new, we have been investing in web3 since 2014, nearly as long as it has been an asset class. We’ve invested in well over a hundred deals and seeded dozens of unicorns at and prior to Hack VC. We also had the distinct privilege of being “institutional investors” in web3 across at least three bull-to-bear-market cycles, as long as perhaps anybody. Let us tell you: it was never easy. Every cycle, we dealt with institutional investors dismissing the very idea that web3 is investable. If we had a Bitcoin for every time we’ve been asked “Where are the use cases?” and “Isn’t crypto illegal?” we would be richer than Gary Gensler by now.

This last down-cycle was flashier than prior ones. As interest rates rose around the world, the speculation-fueled leverage that pooled in the crypto markets exploded, unearthing criminal activity and headline-worthy developments along the way, such as the infamous blowup of FTX. Beneath the surface, however, the cycle wasn’t much different than the others. Builders continued building—and we continued investing—through the doom and gloom and, as we anticipated, a new up-cycle has emerged.

With our new fund, we are planting a flag as unwavering long-term believers in web3, and committing to funding even more of the core blockchain technology that we have been investing in for so long.

Web3 is in a pivotal moment akin to the mid-1990s for the Internet. With millions of users and regulatory clarity emerging across the world, it is clear that web3 is here to stay. Yet, like the Internet pre-Windows 95 and pre-Netscape, web3 is barely usable for its existing users and downright unusable for the mainstream. Web3 needs an infrastructural paradigm shift across scalability, security and usability before it is ready for prime time. And that is happening. The next Google, Microsoft, Amazon, and Alibaba for web3 is already here or will launch soon. Our job at Hack VC is to find and support these critical pieces of web3 infrastructure—as we have done for over a decade.

Hack VC backs the hackers building the future of the Internet. We invest at the earliest possible stages and have built a full-stack platform to uniquely help founders get to market and go mainstream, which includes:

  • hack.labs(): we have a team of quant traders, engineers and researchers that are some of the first users of the protocols in which we invest. We are one of the most active institutional participants on-chain, providing liquidity into DeFi pools, staking, making open-source contributions and building tooling to help pave the way for future institutional participants to join the networks.
  • hack.summit(): our global developer community and events network. Our conferences, hackathons and hacker houses have had 130,000+ attendees from 150+ countries to date. This community has helped open-source software protocols attract developers for years (and, in our past lives, we created the world’s largest Java developer community of 500k+ members and rolled out developer-focused content marketing programs to millions of developers).
  • Our network and support: we’re a small and top-heavy firm. Our partners have supported dozens of web3 founders from the beginning as they’ve grown into unicorns and category leaders. We are particularly proud of helping the category-creators: the founders building interesting businesses and protocols years before there was a “narrative” or even a category name for what they were doing, like “DeFi” or “Layer 2s.” We offer the strategic advice, network and learnings we’ve accumulated from these past 10+ years to all of our founders.

We don’t believe in narratives. Instead, we are thesis-driven and invest with fundamental conviction. These theses include:

  • More secure web3 infrastructure: smart contract hacks and protocol attacks today are like the viruses that plagued Internet users in the early ‘90s—endemic and a constant part of digital life. Better infrastructure can solve this. Several projects are bringing the more secure MOVE programming language to blockchains, such as Sui, one of our investments that was founded by the language’s inventors, and Movement Labs, a Layer-2 Protocol, which is bringing the MOVE language to Ethereum. Others include EigenLayer, a modular “shared security” protocol that allows users to restake their ETH to secure entirely new blockchains and applications, and AltLayer, which allows developers to build EigenLayer-backed “restaked rollups,” which are both existing portfolio companies.
  • More capital-efficient and real-world DeFi: we view DeFi as the first major set of use cases for blockchain outside of the foundational Store of Value use case for Bitcoin. Blockchains will disrupt the financial system first, and likely most profoundly. But today, DeFi is extremely capital-inefficient and limited in its support for real-world assets. Some of our investments to fix that include Goldfinch, which brings private credit markets on-chain, and M0, middleware infrastructure that allows institutions to mint cryptodollars and bring their associated backing collateral on-chain. In capital efficiency, we are early backers of Berachain, a new Cosmos-based L1 whose pioneering “Proof of Liquidity'' consensus mechanism leads to significant capital efficiency improvements for DeFi built on its network, as well as Vertex Finance, a decentralized derivatives exchange that offers CEX-like usability and cross-margining.
  • Web3 x AI: more and more companies are exploring the intersection of web3 and generative AI. We are investing both in blockchain infrastructure that can support generative AI applications, as well as generative AI infrastructure that can power new types of decentralized experiences. Our investments in this category include Jasper AI, a generative AI copilot for enterprises, and Ritual, an AI coprocessor for blockchains. Expect to see many more soon.

Our mission is clear: to support the founders who are building the critical infrastructure needed to take web3 mainstream from their earliest days. And this fund is an important step to that end. We are eager to help our founders build and are grateful to our LPs who share our deep conviction in this asset class.

This article is for informational purposes only and does not constitute a recommendation to buy or sell securities or to pursue any particular investment strategy. This article should not be relied upon in evaluating the merits of any investment or any particular investment strategy. You should consult your own advisers as to business, financial, tax, legal, and all other related matters concerning any investment. The views expressed in this post reflect the current opinions of the authors and do not necessarily represent the opinions of Hack VC Management, LLC (“Hack VC”) or its affiliates. Certain information in this post may have been obtained from third-party sources, including portfolio companies of Hack VC. While we believe those sources to be reliable, Hack VC has not independently verified the accuracy of such information. Content is as of the date posted and subject to change without notice. Hack VC makes no representations about the enduring accuracy of information or its appropriateness for any given situation. Please see https://www.hack.vc/disclosures for additional important information.