Introducing Not Boring Capital: Investing in Companies with Stories to Tell

Introducing Not Boring Capital: Investing in Companies with Stories to Tell

Not Boring Capital is not your typical venture fund. With $8 million in capital, we invest in companies that have compelling stories to tell and help them share their narratives with the world. Our primary focus is on Seed through Series B companies, although we occasionally make pre-seed and growth-stage investments as well.

What sets us apart is our belief that investing and writing go hand in hand. Our founder, Packy McCormick, is both an investor and a writer, and he believes that these two skills complement each other. By investing in companies and understanding their stories, Packy has become a better investor. Likewise, his writing skills have improved as he delves into the world of investing. This symbiotic relationship creates a powerful flywheel that drives our success.

Fintech is one of our leading verticals, with a particular emphasis on investing technology. We have made six investments in fintech companies, totaling $525k. However, we are not limited to this vertical alone. We look for opportunities across various sectors, as long as the companies have the potential to provide substantial returns in the bull case.

Our investment strategy consists of three core components: Core, Explore, and Growth. The Core investments are those with the potential to return the fund in the best-case scenario. These investments make up about 75% of our total dollars invested. Explore investments are smaller and aim to secure a seat in the next funding round or increase deal flow. While they have high upside potential, they are not expected to individually return the fund. Explore investments make up about 5-10% of our invested dollars. Lastly, Growth investments are later-stage or safer bets with a lower ceiling but a higher floor. These investments, representing about 20% of our invested dollars, collectively have the potential to return the fund once.

Looking at the broader landscape, the ownership economy has emerged as a powerful force in 2022. This concept involves transforming users into owners, giving them a stake in the products and services they use. More than 15,000 projects now exist within the ownership economy, ranging from user-owned financial markets to social networks and digital assets. The market capitalization of tracked tokens in the ownership economy stands at $1.76 trillion, with established blockchains like Bitcoin and Ethereum leading the way.

One key challenge in sustaining user ownership is the need for strong product-market fit. Simply giving users ownership is not enough to ensure long-term success. Tokens can capture attention and drive initial adoption, but they must be coupled with a product that solves a widespread need for users. In marketplaces, liquidity remains a significant motivator for user choice. Additionally, there is a question of whether ownership actually crowds out intrinsic incentives to use a product, leading to a more transactional and temporary engagement. Balancing extrinsic token incentives with preserving users' intrinsic motivation is crucial.

To boost user loyalty, new token distribution designs are emerging. While liquidity mining programs have driven short-term participation, they have not contributed to long-term sustainability. Projects like Axie Infinity have shown that strong player retention is possible, suggesting that engagement goes beyond novelty. Voting escrow contracts and vesting mechanisms are being introduced to encourage long-term engagement, emphasizing contributor growth and expanding the ownership economy's user base.

User ownership also fosters richer ecosystems of projects and contributors. Shared ownership reinforces network effects and creates a disincentive to switch to other blockchains. This permissionless nature attracts users, creators, and developers to build around and on top of these projects. Projects that enable free use of assets extend the definition and possibilities of ownership, stimulating collaboration and creation.

The ownership economy allows users to become owners earlier and participate in value creation. Web3 companies are launching tokens an average of 2.7 years after founding, compared to VC-backed companies that go public around 5.3 years after securing their first VC investment. Ownership is extending beyond the realm of crypto and is becoming a key aspect of new experiences across various software products.

In conclusion, the convergence of Not Boring Capital and the ownership economy highlights the power of storytelling and user ownership. By investing in companies with compelling stories and helping them share those narratives, we aim to drive success and create positive social change. As the ownership economy continues to evolve, it presents both challenges and opportunities for builders and users alike. To navigate this landscape effectively, consider the following actionable advice:

1. Focus on strong product-market fit: When incorporating user ownership, ensure that your product solves a widespread need for users. Tokens alone are not enough to sustain engagement; they must be coupled with a valuable product.

2. Design token incentives for long-term loyalty: Explore new token distribution designs that prioritize contributor growth and long-term engagement. Avoid short-term liquidity-focused programs that may lead to high churn rates.

3. Foster collaboration and network effects: Embrace the open and permissionless nature of the ownership economy to attract users, creators, and developers. Encourage the free use of assets to stimulate building, creation, and collaboration.

By following these actionable steps, you can navigate the ownership economy and leverage its potential for growth and positive impact. Whether you're an investor, entrepreneur, or user, the ownership economy offers exciting opportunities to participate in the next generation of the internet.