The design space for founders is much vaster today than 8 years ago. For example, payments at scale are now possible via Lightning Network. Soon stablecoins on Lightning Network (Taro) will allow for LN adoption by people without the means to tolerate BTC's volatility. As the design space widens, the number of people and types of business that can find value in bitcoin technologies grows (i.e. the addressable market is expanding). The pace of innovation is very fast and every year presents a new set of entrepreneurial opportunities.

What I'm most excited and concerned about is founder attention to user feedback. Companies that dive into their engagement KPIs to understand what's working and what's not, what products are providing sustainable value for their users and what's lacking, will have a significant advantage. The opportunity to iterate based on user feedback to find greater adoption is critical.

Because bitcoin companies don't rely on tokens to drive early adoption of their technology or product, user metrics and clean and can drive key discovery about their user base and product.

Good board members are prepared. Great board members are prepared, empathetic, and impervious in temperament to the peaks and troughs that comprise a private company's development.

Treasury management strategy has been especially important for bitcoin companies. Many have been able to diversify their treasury to include BTC, buying low and hodling to extend runway in a non-dilutive way as BTC appreciates over the long term. Of course, depending on BTC to appreciate or remain stable in the short term is antithetical to mature treasury management.

When evaluating a company's health and runway, we review both the cash-only (USD) runway and the cash + BTC runway. The cash-only runway should be sufficient to assure the health and stability of the company over an appropriate period of time. In current conditions, a company's cash-only runway should probably fall between 18-36 months. In a stronger macro environment, it may be appropriate to maintain a 12-month cash-only runway, converting BTC to USD as runway falls below 12-months.

Because a company's liabilities are still denominated in fiat (USD), most companies will need to/choose to observe the same standard.

places I haven't been yet + Italy, Singapore, and NYC all for different reasons

We think of other funds that invest in Bitcoin companies as an extension of our own team at Stillmark. Collaborating with other investors to support and resource founders is a very standard part of the work and something that I really enjoy.

I'm so thrilled and grateful to work with bitcoiners advancing bitcoin's/BTC's adoption. Bitcoiners aren't a monolith, but what is true of many is that they care about financial inclusion and freedom and are keen to learn or re-learn about what money is and what it can or should be through bitcoin. Software rules without rulers- there's a modesty required in adopting an asset (bitcoin!) that is defined by this standard.

Bitcoin will mean different things to different types of users, and the approach I take is to view all engagement without judgement. In other words, I don't think there's a right way or a wrong way to use bitcoin. I expect that many users still yet to onboard to bitcoin will use it very differently than I do today. I'm excited and curious about what that will look like and the value they will find. An example of this may be introduced via Taro: USDT/stablecoins on Lightning Network such that the LN protocol can be used for nearly free, instant, 24/7, global payments without users being exposed to BTC's volatility. I can imagine that serving an acute need for underbanked populations that don't have extra funds to save at the end of the month.

Great question, difficult to answer. The financial metrics and KPIs that we look for ahead of a new investment is specific to the company and the company's stage.

Generally speaking, a very early stage company should demonstrate a clear understanding of an opportunity to (a) provide value to an identified user group and (b) a plan to monetize that value efficiently. Variable (a) is the product and (b) is the business model.

For example, "BTC hodlers in Southeast Asia need X. We believe we can acquire these users for $Y/user and charge $Z/user/yr."

As a company matures, these hypotheses are tested and user feedback can be applied to evolve the product and marketing. This should accelerate growth and drive a company's financial health and overall progress. Metrics that prove such an evolution are evaluated at that stage.

Stillmark is a generalist fund in the Bitcoin field investing across the spectrum of Bitcoin innovation: infra, apps, mining, dev tools, etc.

In Q3 2022, we've been particularly excited about infrastructure and mining. On the former, there's still critical infrastructure to be built to financialize BTC and to progress LN for payments. You see this reflected in our most recent investment activity: Hoseki, Amboss, IBEX, Voltage.

https://www.hoseki.app/ https://www.amboss.space/ https://www.ibexmercado.com/ibex-hub-info https://voltage.cloud/

Another thing that these teams share, along with the rest of our portfolio companies, is that they're led and staffed by very high quality decision makers, engineers, and operators. Talent comes first. Stillmark has been very fortunate to partner with incredibly gifted entrepreneurs and that quality is much more important than sector or company type.

Stillmark's investment mandate includes startups built on Bitcoin's sidechains, such as Liquid Network, as well as Lightning Network. When considering a company for investment, we also have to evaluate and weigh the state of the protocols it depends on. We're also bullish on the impact Lightning Lab's Taro protocol will have on the design space available to developers and other entrepreneurs.

Stillmark meets with several hundred startups every year, so there's a lot of variability in the founders that we talk to!

In any growing market, the opportunity for new companies is to benefit from the market's growth. There's an undeniable tailwind for Bitcoin and Lightning Network-based companies, just as there was in 2008 for companies built to leverage either the advantages or adoption of cloud technologies and mobile platforms. For the early stage companies in our portfolio, the aim is not just to match the market's growth but to surpass it. In other words, the target is to grow market share or penetration as the market grows.

On the flip side, in a bear market, a more modest growth cadence that still surpasses the state of the market can be expected from even the top tier of companies.

In summary: When we evaluate a company's growth and progress, we do so in context of how it's matched the state of market adoption. In determining progress we adjust for the conditions of a bull or bear market.

That's a tough question because we're not necessarily looking to outperform BTC- The types of companies we back should help drive BTC's adoption and utility, which could have the impact of supporting BTC's fundamental value (and perhaps its exchange rate). Historically, BTC's adoption and price have been positively correlated. If that relationship continues to hold, then the work of many of the companies in Stillmark's portfolio will have a positive impact on BTC's price.

Building a company is challenging in any field. Every company's trajectory will have peaks and troughs, and every successful company will have great luck and opportunity as well as incredibly strenuous periods.

In Bitcoin, while you have the key advantage of building on or alongside a secure, reliable, and consistent protocol (vs. alt-protocols that may have significantly more downtime, security gaps or uncertainties, and broad malleability), you're also building in a field that is undercapitalized. There are fewer venture dollars available for Bitcoin startups than for crypto startups. (Note that we expect that this will change over time.)

While money seems to be deployed without study in the Web3/crypto/token field, the same is not true in Bitcoin. Founders have to prove more to access the same resources as their peers in the "crypto" field.

The strongest founders use these constraints to their advantage. They get to breakeven quicker by focusing on revenue and cash flow, rely on careful treasury management to extend runway, and go heads down on customer feedback - both qualitative and quantitative - to accelerate product-market fit, revenue growth, and the company's independence quicker than others who've had the luxury of depending on easy cash from venture investors.

In 2020 or earlier, VC Angela Strange (a16z main fund) noted the trend towards "Every company becoming a fintech company". That's a trend that can be significantly accelerated by Lightning Network. Her premise is an acknowledge of how ubiquitous payments/payments tech are in the everyday lives of people in developed markets- in other words, people with access to a debit or credit card.

But better than access that is access to a Lightning wallet.

App developers generally rely on > third parties for payment processing and through them the > traditional payment rails that those payment processors depend on. That defines what type of payments can be done, when, with whom, etc. LN opens up the field by reducing the friction of the traditional payment rails. One of the simplest demonstrations of that is the new viability of micropayments. This is relevant to various forms of content consumption (gaming, blogs, pods, voice and video, etc.), machine to machine value exchange, and so on.

Good question! The impact of LN for payments in general is under appreciated. LN allows for any exchange to be done more efficiently and independently (i.e. without gate keepers), which opens up global commerce in a new way.

One area that we've been excited to see develop is the efficient monetization of machine to machine communication (e.g. APIs), perhaps via Lightning Labs LSAT protocol.