BUILD YOUR FORTUNE IN THE FIFTH ERA

Blockchain Coinvestors Newsletter

Vol. 3, No. 20, September 2021

It was some six years ago that we sat down to put pencil to paper in order to sketch out the contents of our first book, "Build Your Fortune in the Fifth Era." At the time we were already convinced that the world was transitioning out of the Industrial Era into a new time of unprecedented innovation and change - that we named The Fifth Era - and that this would in turn represent a period of value and wealth creation unlike anything the world had ever seen before. This weekend, a reader suggested we go back to that first book and summarize it in our newsletter - they felt that the essential points made back then were as relevant today as ever. So in this newsletter we cut and paste three readings from the book:

  1. The book overview

  2. The list of characteristics of the Fifth Era

  3. Our closing chapter where we implore our readers to 'happen to things'

Here you go.

1. BOOK OVERVIEW

The Internet didn’t even exist 30 years ago, and now billions of people are connected to the web every day, and remarkable new technologies have been invented that will dramatically change the way humans exist on our planet. This emerging playing field is not well understood and not everyone who was successful in the past will be able to benefit from this momentous shift. “Build Your Fortune in the Fifth Era,” outlines the nature of the change the world is in the middle of, describes many of the disruptive innovations and the impact they are having, shows why this is the greatest phase of wealth creation the world has ever seen, and provides options and a decision-making process that will allow every reader to choose how to play—or will at least make them more informed if they make the decision not to. 

2. CHARACTERISTICS OF THE FIFTH ERA

We would like to share our list of the top fifteen characteristics of the Fifth Era that we see as particularly important to watch and track. They are:

  1. The development of an entirely digital world in which information, communication, and collaboration are comprehensive and instantaneous.

  2. The invention of new and unimaginable innovations at the intersection of the Digital Revolution and the Biotechnology Revolution and a constant flow of a host of other disruptive innovations feeding off the global availability of knowledge and new collaborative innovation approaches.

  3. Addressable target markets rapidly becoming global, allowing disruptive innovations to quickly be adopted by billions of people.

  4. Consumers gaining enormously as the choices they have will be multiplied by a host of competing solutions and providers, and prices will fall given the economies of scale provided by serving global markets.

  5. There will be a reevaluation of what humans value and what makes us happy, with significant implications for markets for consumer goods and services. The next generations may value simplicity/less over-clutter/excess, and experiences over material goods.

  6. A dramatic increase in productivity. But, this time it will not just be increases in labor productivity. Instead, physical asset productivity will also be greatly enhanced, and formerly unproductive assets will be made available for others to use on demand.

  7. The Industrial Era large corporate model of organization will be challenged, with the largest companies increasingly extending their enterprises beyond their four walls and looking more like virtual entities.

  8. Public markets will need to evolve to address their shortcomings, for example short-termism.

  9. Private capital will drive the initial stages of development for most emerging innovations capturing much of the value of new disruptive innovations.

  10. Sustainability will become an essential part of doing business with a clear focus on the broader societal impacts of company strategies including the quality of jobs, the full impact of products and services on society and other external considerations.

  11. People will have much more freedom to spend their time according to their desires. Multi-tasking, parallel working, and short-lived organizations and workgroups will be the norm, and the very notion of work will change.

  12. Distributed innovation will be everywhere, with no monopoly on innovation by any one company, country, or region. Most innovation will come from small, emerging players, with large corporations being the “go-to-market” partners for innovators.

  13. There will be a global war for talent as every digital innovation hub and every region and country try to keep their own technology innovators home and attract those of neighboring regions in order to further strengthen their innovation economies.

  14. The power of diversity will be increasingly understood and leveraged.

  15. Traditional philanthropy and the for-profit model will come closer together as non-profits look at becoming more sustainable in social entrepreneurship models, and as for-profit corporations aim for double and triple bottom line outcomes.

Because of these changes, every industry, every profit pool, in every country, will be fundamentally challenged as we move into the Fifth Era. We believe that it is possible to already see significant new areas of economic opportunity and wealth creation by divining carefully through these glimpses of the future and making a few bets.

3. HAPPEN TO THINGS

"It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things." —Leonardo Da Vinci 

For 30 years we have been in Silicon Valley and have been exposed to the world’s leading innovation cluster. Over that time, almost by osmosis, we have observed and absorbed from others so much about this most dynamic of times. This book summarizes what we have learned. To reiterate:

  • The world is entering a new era: the Fifth Era.

  • This is being driven by a host of disruptive innovations, with the Digital Revolution and the Biotechnology Revolution central among them.

  • Everything we as humans do is being questioned at the most fundamental of levels.

  • The underlying assumptions, formulated in the Industrial Era and in the eras before it, around which we’ve structured our lives, cannot be taken for granted.

  • Each time new disruptive technologies enable an underlying assumption to be made obsolete, they open up the way for new business opportunities—and for the entrepreneurs and businesses that exploit them.

  • This represents the greatest wealth-creation opportunity the world has ever seen.

  • Wealth is being captured earlier than in the past by the entrepreneurs themselves and by those that back them.

  • Most people are on the sidelines. Only 0.2% of the US working population are becoming fundable technology entrepreneurs each year, and only 2.5% of the accredited investor households are investing as venture capitalists or angel investors.

  • Meanwhile, the principal investment strategy of the Industrial Era of investing in the public markets does not seem to work as well anymore.

  • Instead, in this time of transition you need to invest early in disruptive technology companies in order to secure your position or find another option for playing and building your fortune in the Fifth Era.

Now is the time for action. The time of transition is not only one through which the world is passing, but also it is a time of transition for many people. The coming Fifth Era is a chance for each person to make a choice to change from being a spectator on the sidelines to an active player in the greatest of games.

And, for those of our readers who decide to go another way and take a purposeful decision not to participate, we would like to end by sharing with them a final thought:

One day you might wake up and realize that you slept through the greatest moment of change the world has ever seen. We implore you to not let that happen to you.

Good luck.

"It’s the job that’s never started as takes longest to finish." —J. R. R. Tolkien 

CONCLUDING COMMENTS

When we wrote this book we were just ramping up our own investing focused on Blockchain and Fintech. We felt it was worthwhile synthesizing our rationale at that time. Now, living in another decade, a lot of those words look obvious to us, and perhaps to you. However, another point we made back then was that the time of transition between eras is not fast - that it may be many decades before the world completes this transition to The Fifth Era. This in turn implies that new opportunities will continue to surface. The world and all of its innovators won't stop innovating. 

Which in turn implies that for investors it is not too late to get started.

Thank you for reading.

Alison Davis
Matthew C. Le Merle

ABOUT BLOCKCHAIN COINVESTORS

Launched in 2014, our goal is to provide broad coverage of the emerging unicorns and fastest growth blockchain companies and crypto projects. The strategy is now in its 8th year and has to date invested in more than 25 pure play blockchain venture funds in the Americas, Asia and Europe; and in a combined portfolio of 300+ blockchain and crypto projects including 30+ blockchain unicorns. Our funds rank in the top decile amongst all funds in their respective categories on both Pitchbook and Preqin. Headquartered in San Francisco with a presence in Grand Cayman, London, New York, Zug and Zurich, the alternative investment management firm was co-founded by Alison Davis and Matthew Le Merle. 

FUND PERFORMANCE

Blockchain Coinvestors Funds are continuing to generate strong returns. To date, over 80% of the funds we are invested in are performing as top quartile funds against the Cambridge Associates benchmark. This remarkable performance results from powerful tailwinds driving the world towards a future in which digital monies and digital assets are ubiquitous and the businesses and projects providing blockchain and crypto products, services, and infrastructure benefit disproportionately.

BLOCKCHAIN COINVESTORS FUNDS

Blockchain Coinvestors’ goals are to provide broad coverage of the emerging unicorns and fastest growth blockchain companies and to capture superior returns from investing in the leading blockchain venture partnerships:

  • Fund III is open only to investors who meet the Qualified Purchaser definition with a minimum subscription of $250,000.

    • A “qualified purchaser” is an individual or a family-owned business that owns $5 million or more in investments. The term “investments” shouldn't include a primary residence or any property used for business.

  • Fund III Parallel is open to investors who meet the Qualified Client definition with a minimum subscription level of $250,000 at the discretion of the Manager. Please contact ir@blockchaincoinvestors.com if the minimum is of concern.

    • Currently, an individual or entity is a qualified client if he, she, or it: (i) has a net worth of $2,200,000 prior to investment in the fund (excluding the value of his or her primary residence).

While the two funds are substantially the same, there may be some funds and investments that are only available in the Qualified Purchaser vehicle. Blockchain Coinvestors funds can take investments via IRAs. We support several providers, including AlgoIRA, Kingdom Trust, Millennium Trust Company and Pacific Premier Trust Company (Pensco).

Please visit the Blockchain Coinvestors website to learn more about our offerings. You can also reach our Investor Relations team directly at ir@blockchaincoinvestors.com.

BLOCKCHAIN COINVESTORS SWISS

We are excited to announce that Blockchain Coinvestors Funds are now available through Swiss certificates for those of our non-US investors who prefer this approach. The underlying fund is the same, however, our Zurich based team at Blockchain Coinvestors Swiss, who will introduce in future weeks, can provide detailed information regarding this investment option. Email us at mlemerle@fifthera.com to learn more.

LINQTO
'Private Investing Made Simple'

While our funds are only available to Accredited Investors who are also Qualified Clients we believe in the democratization of investment access to all investors and look forward to that day. In the interim, we have partnered with Linqto which is an easy to use Mobile and Web app that makes it exceptionally easy to invest into attractive opportunities. The provide access to Accredited not Qualified Client investors as well as much lower minimums. Go to Linqto.com or download the app from your App store to use this approach.

BLOCKCHAIN COINVESTORS ANGELLIST SYNDICATE

Continuing the theme of the democratization of investing, we have a rapidly growing Blockchain Coinvestors syndicate on AngelList providing access to selected coinvestments. Please join us and our partner Lou Kerner on AngelList.

Click here to receive the insightful weekly crypto newsletter and webinar invitations from our Blockchain Coinvestors partner Lou Kerner.

REGISTER NOW FOR UPCOMING WEBINARS AND CALLS

Our investment team hosts bi-monthly webinars and calls to help educate our community about the Fifth Era, fintech, blockchain and crypto. We discuss important trends, tailwinds and investment themes including what we have learned and how we are using our knowledge to inform our own investment thesis and actions. Below is a list of upcoming webinars for which you can register by clicking the links:


Meet the Blockchain VCs

- October 4th, 7:00am PST
- October 4th, 12:00pm PST

What is DeFi and Why Does it Matter? 

- October 6th, 7:00am PST
- October 6th, 12:00pm PST

Options for Investing in Blockchain & Crypto

- October 18th, 7:00am PST
- October 18th, 12:00pm PST

Introduction to SPACs and Update on the Market

- October 20th, 7:00am PST
- October 20th, 12:00pm PST


Recordings of past webinars and calls can be found at www.fifthera.com/webinars.

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