One decentralized finance entrepreneur is on the hunt to back young companies using institutional cash.
Robert Leshner is the founder of crypto money market Compound Finance. Separately from that, CoinDesk has learned, he now has a combined million dollars from Bain Capital Ventures and Ripple’s Xpring to write extremely early-stage checks to very new companies.
The project is called Robot Ventures, both a play on Leshner’s first name and a reminder that automation is coming for all work.
“I think the robots will take our banking jobs as well,” Leshner told CoinDesk.
A scout fund is a fairly recent development in the broader technology world, and Leshner doesn’t know of another one looking specifically for crypto projects. That said, scout funds are known to operate somewhat secretively, so there’s no way to be sure.
Scout funds are distinct from angel investors in that they have a direct link to institutional money, with an eye toward investing in later rounds. An investment by such a group increases a new founder’s access to the fund’s funders (in this case, Xpring and Bain, which is one of the world’s largest investment firms with over $105 billion in assets under management).
“In general the check size is $25,000 to $100,000. These are not large investments,” Leshner said, but part of the deal is that he’s communicating with the two institutional backers about his picks.
Founder as funder
“I’m one of the few crypto founders investing this early and this formally,” Leshner said.
Robot has made two investments since taking on backing from Bain and Xpring – one into home-mining startup Coinmine and the other into Point, a new kind of debit card.
As a founder, Leshner argued he brings two advantages to running Robot. First, he sees the new trends in crypto finance first, from the grassroots level. “We see innovations happening in DeFi very early,” he said.
Second, it makes him uniquely relatable to young founders. “What gives me a different approach is that 95 percent of my time is spent building Compound,” he told us, “and I can interact with other founders really as a peer, just one or two years ahead of them.”
Bain was previously an investor in Compound Finance and that relationship led directly to its backing of Robot (prior to the investment, Leshner operated Robot as a more traditional angel fund).
“We enjoyed working with him and brainstorming about the sector so much that we set him up on AngelList as a small fund manager and put him in business by becoming the anchor investor in his small fund,” Bain Capital Ventures partner Salil Deshpande told CoinDesk.
Deshpande said that when Bain finds a rewarding relationship with a founder, “we come up with scalable ways of working with them.”
Meanwhile, Ripple (by way of Xpring) is a new backer for Leshner’s work. “I’m an open finance maximalist,” Leshner said.
“Robot Ventures is unique, given Robert is a DeFi founder himself,” said Ethan Beard, SVP of Xpring. “He’s a valuable resource for new founders seeking to make an impact on and improve financial services through crypto. We’re excited to work with Robert and support the next generation of entrepreneurs.”
As an angel investor, Leshner had previously backed a startup based on Ripple’s Interledger banking protocol and he said he looks forward to doing more in that space.
For those and other crypto projects, the hope is that Leshner’s direct connection to Xpring and Bain makes getting that first big round all the easier.
“It just tees up those relationships much more quickly.”
Robert Leshner (second from right) image courtesy of Compound Finance