This week I have something different for you. I am interviewing Danilo, the founder of Morningstar Ventures. They are a venture capital fund focused on the crypto space and in our conversation I hope to give you the perspective of what the big money early stage investors are doing. 

– Hey everyone and thanks, Lark, very nice to be here. I am a big fan of your work, and our team regularly watches your content.

Has Morningstar Ventures’ investing strategy changed during the bear market, if so how?

Well, to be fair we have still been pretty active throughout the last few months. Probably too active, considering that although prices have plummeted, valuations of projects that are fundraising didn’t go down proportionally. We are definitely going to be more careful in the next two quarters of 2022, and in particular be more picky with games.

What support does a venture capital firm like Morningstar actually offer to start ups beyond just money?

Besides money, primarily we offer time. Time to help projects plan out its go to market strategies, time to support projects bringing on board other strategic investors, time to assist projects in making the right biz dev connections to grow its ecosystem, etc.

What single investment has been your most successful and what lessons can you take from it?

Well, without a doubt, my best investment was Elrond. The biggest lesson there was to always trust your instincts, and to always bet on founders rather than products or narratives. Ideas can evolve, they can be adapted or fixed, but the founders are human – and humans are harder to fix than ideas. That being said, if the right people are ahead of the ship, that’s a very good first step in the right direction for any startup.

I can see that you have a big focus on the Elrond ecosystem, why?

As per above, Elrond is an important asset in our portfolio. We have been close to the team for many years, and believe in their approach. The community that grew around Elrond is very organic and passionate, and that fuels our beliefs that this blockchain is here to stay. From an investment point of view, it’s exciting for us to support projects building on Elrond, as everybody in the ecosystem knows us and is aware of how much we support the network on all fronts.

Morningstar launched an Elrond Incubator fund, what projects have you incubated so far?

So far, publicly, only one, namely Itheum – which is a really cool data brokerage platform enabling cross chain asset swaps, with a particular focus on gaming data and all things metaverse. Besides Itheum, we also partnered up with Elrond Apes, the number one NFT project on Elrond, that we have been accelerating and supporting very actively throughout the last 6 months. There are also 2-3 projects we are very close to and are supporting internally with many resources that are yet to be announced and are long term plays we will share more about towards the end of the year.

Has Morningstar started to dabble in the NFT space? What future do you see for NFTs?

Yes, we have but very selectively. Besides Elrond Apes that is built on Elrond, a cool NFT project we are invested in is pjpp.io, a creative and cool project out of Switzerland that is bringing exclusive utilities to its holders. Besides these two, what I can reveal is that one of the projects that we are incubating is actually an NFT project. Generally speaking, I am convinced NFTs are here to stay and they will be adopted by applications in our everyday life.

What do you look for when making an early stage investment, and what are the next big trends you are investing in?

Besides the grit and personality of the founders which is our primary criteria, it is also the specific area that they aim to tackle that is important to us, and also how much we can actually help them in achieving their success. For example, we are not super experienced with defi, so we are less active in defi related plays. We are pretty experienced with all things social and gaming, so naturally we are more active in that area. In general, there are a few fields we are particularly interested in for the upcoming cycle, such as all the ‘earn related’ social apps, education apps aiming to bring more users into the ecosystem, and last but not least, ai related crypto projects. We believe we will see some very interesting things in those areas over the coming 2 years.