Good morning, Jeff John Roberts here. Happy Star Wars Day to those who celebrate. The venture capital crowd, in my experience, is not shy when it comes to telling their story to the media. So it was a surprise to encounter Ethereal Ventures, a firm that has been around since 2021, but has chosen to refrain from doing press until now. I recently spoke with Min Teo, who started the firm along with billionaire and Ethereum cofounder Joe Lubin, and here is what she had to say.
Teo, who cut her teeth in private equity and with the pension giant CPP, joined the Ethereum shop Consensys in 2018 to help run its investment arm. Like so much of crypto, Consensys had a chaotic reputation, but in time, Teo was able to bring order to its investing process, and helped spin out Ethereal in 2021.
Today, Ethereal holds just under $150 million across two funds, and has made pre-seed and seed round bets on over 80 startups. The thoroughbred in its stable is EigenLayer, which offers a type of crypto-based financial engineering known as restaking, and notched a $1.05 billion valuation last June following a $100 million Series B round led by Andreessen Horowitz.
The world of crypto investing hasn’t been so hot of late, with Dragonfly’s Rob Hadick going so far as to predict a “mass extinction event,” but Teo says Ethereal has been able to hold its own thanks to its niche expertise and its founder-friendly focus. This has led to a distribution to paid-in capital (DPI) rate of 0.12 for its inaugural fund. That number won’t have any investors doing cartwheels but, as Ethereal points out, Carta data puts its DPI rate in the top 10% of all funds launched in 2021—a notoriously rough year for new investments. This top-of-the-pack ranking is no doubt helped by EigenLayer, but may also have gotten a boost due to a portion of the fund consisting of liquid tokens. Meanwhile, Ethereal has plenty of dry powder as its second fund, which launched in 2023, has deployed less than a quarter of its capital.
Ethereal’s name is a nod to the blockchain that has traditionally been the north star of its investing strategy and Lubin, the Ethereum cofounder, has stayed on as CEO of Consensys. But Teo says the firm’s remit is broad enough to include non-crypto projects as well as other blockchains, noting “Joe’s allowed to have a favorite child, but there’s room for other children.”
Finally, Teo says Ethereal’s success stems in part from sticking to early-stage startups and resisting the temptation to jump on bandwagons. She cited the current craze for prediction markets, noting there are now at least 30 would-be rivals to Kalshi and Polymarket, but that Ethereal has avoided them on the grounds it may be too late. Makes sense. Thanks for reading—Allie will be back in your inboxes tomorrow.
Jeff John Roberts X: @jeffjohnroberts Email: [email protected]
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