Haun Ventures Founder & CEO Katie Haun

and welcome to this edition of Bloomberg Studio one point. Oh, I'm so excited about our guest today. She started her career as a federal prosecutor, going after gangs and the mob before being handed her most consequential assignment, taking down bitcoin. Katie Han soon realized this new technology was much more than a tool used by criminals. She dove deep and became a crypto convert, swapping her prosecutor hat for a board seat at coin Base and became the first female

general partner at the venture capital firm and recent Horowitz. Han, now a prolific crypto investor, recently launched her own fund with one and a half billion dollars to deploy. It's the largest fund ever raised by a Soul investor. Here's my conversation with the CEO and founder of Han Ventures, Katie Han. Katie, it's so great to have you. Great to be back here in the studio with you. Emily, I want to start with a vibe check. Okay, what state of the crypto cycle are we in right now?

It was hot and then it got pretty cold. Well, look Emily zooming back. Because I've been in crypto for a decade, if you can believe it, We've seen crypto be really hot and then all of a sudden not

um and so we've seen this before. However, I think one of the things that's a little bit different now is with each new cryptocycle, more and more people come into it, and so it's more and more pronounced each cycle, and I would push back on it's not I think it depends on what area of the ecosystem you're looking at. We think developers think crypto and Web three is still really hot. I am seeing a lot less of those

we're all going to make it hashtags. I'm seeing a lot less of them too, although I am spending less time on Twitter, so maybe that's why. Well, but with each cycle there are there are new acronyms. What hasn't happened is a crypto winter in the midst of kind

of really serious global macro conditions. So we have inflation kind of record highs for our generation and in our lifetime UM, and then we have also a war that's broken out in the Ukraine, and we have a number of other factors going on here, so that's very different. There was some serious carnage out there, Sausius Luna three hours. What's been your takeaways from I don't want to sit here and tell you that algorithmic stable coins are bad,

because I actually think they're really interesting UM. However, I think what happened is you had UM in this case. You mentioned Luna and Tara. You know that was an algorithmic stable coin UM that was getting pretty widespread adoption UM relative to what the tech could do. I didn't realize you spent your teenaged years living in Egypt and learning Arabic. Tell me about your upbringing. I was always uprooted. UM. My dad worked for a large company and we were

always moving. Just when I would get comfortable in one space. And I think, actually that's pretty important if you fast toward and look at my career. Um, I'm comfortable being in uncomfortable situations, you know. I was. I didn't know a lot about venture when I got into it initially. Um, I didn't know a lot about crypto when I got into it initially, And I was okay asking questions. I was okay not knowing the local acronyms or a nomenclature

of a particular field. And I'm you know, I'm taken right back to my teenagers in Cairo, moving from Houston, Texas one day to downtown Mahdi in Cairo the next day. You studied law. I did you clerked for Supreme Court Justice Anthony Kennedy? Right? You became a federal prosecutor. You were taking on prison gangs and the mafia. That must have taken a really thick skin, And I was doing

it at um. And now, if I kind of take a step back, and you I think that happens at different points in your career, Like WHOA if I would have analyzed that a little more at the time, And I'm kind of in some ways glad I didn't. I just dove right in because I found it fascinating. There was a human aspect to it and people's stories, and

I felt like those stories mattered. So I was drawn to criminal law and became a federal prosecutor, and I did cases involving violent crime, but then really mistrying cases, being back in the courtroom, being before the grand jury. Like the prosecutor you would see on TV going to try those murder case is doing those two hour closing argument. That's right. And so moved out here to California indict at the largest prison gang in the world at the time.

UM outlaw, motorcycle gangs, hostage taking. Bank robberies are bank robberies. There was really not a kind of criminal case. By that point in my career I hadn't done. And it was right around that time two twelve one of my bosses came in and said, let's have that same energy that you brought to those gang cases, to those murder cases, and let's go ahead and have you investigate this new criminal technology that we really need to look into and

possibly shut this down. So you created the first cryptocurrency, how would you describe it? Fortunately, several of us in the government realized at the time it's not possible, also not desirable, because bitcoin is not an entity. It's not a person um right, it's a protocol, And it would be like saying, let's go shut down cash, let's go shut down the Internet. It's not possible. Probably wouldn't be

a good idea either. And I was using crypto and techno allergies like the bitcoin blockchain, because that's all it existed. Then this is to actually uncover criminal activity. So I didn't think that that technology was bad. Frankly, it was a tool that helped me uncover the various activity. And by the way, it was a step level function improvement better then compliance by banks. I'll just go ahead and

say it. That's a little bit controversial, but I had spent a decade subpoenaing large financial institutions and five times out of ten didn't get back what I needed. One case I worked on and people always say, oh, you

shot down the silk road. What actually happened. I was looking into something completely not having to do with anything at all of the silk road and came across some what looked to be some kind of odd activity, and it turns out that a couple of federal agents on the Silk Road test force out of Washington, d C. Were croaked. And that is the case that I ended up in dibting and I ended up prosecuting those agents

sin they both went to prison. So that's the aspect of what the Silk Road case that I worked on. I would never never have been able to uncover that criminal activity by those agents because they were federal agents, they knew how to cover their tracks. Had they not used bitcoin blockchain, right that, so that technology right there, if they had just used wires or cash or bank wires, we would never have uncovered that. So you became kind of a crypto convert after this. You joined the board

of coin base very early on. How did you in coin Base and Brian Armstrong come together. I hosted UM an event here in San Francisco at the Federal Reserve Bank, and I believe it was there that it wasn't just Brian. It was a lot of what I'll call legitimate actors and crypto who wanted to usher in this new UM wave, this new ecosystem UM. And then we brought together the heads of all kinds of agencies really in an effort to kind of talk about building bridges. You know, the

government and the crypto industry. We're never going to see eye eye on a lot of things, but we did think there were some commonalities. Coin Based is a company that has suffered. They've been losing share, the valuation of the public markets has plummeted. Why do you think that is and how do you think it can be fixed? Yeah, well,

I think again a few things. It's tied to one, a large aspect of coin BASAs business now of course, as trading revenue, and that's down when prices are down, and you know, the company has been very transparent about that long before going public. I mean also, if you look at its S one, it's specifically identifies that um and just how volatile crypto cycles are. So I think that's part of it. It's judged, you know, by public markets as a technology stock or as a financial services company.

By the way, I think it's both. I think it's not just a financial services company. I think it's so much more. I think it's really a portal to this whole new ecosystem. You are also on the board of openc until recently, Uh, there's an insider trading situation or accusation going on. Their coin Base has also had employees accused of insider trading. How much is this happening within crypto companies and within the industry and how big a

problem is? I think crypto is under the microscope. So where you have a case, two cases, three cases in crypto ecosystem, which now is a trillion dollar industry um, I think multi billion approaching trillion dollar industry, UM, You're always going to be able to find examples like that. So I don't want to make too much out of a handful of cases. That said, the company, coin Base

opency take these things incredibly seriously. Along with your position at coin Base, you became a partner at one of the most story venture capital firms and Silicon valiant, that is Andres and Horowitz. What was your experience at a sixteen Z like there. I met Chris Dixon, and I met Ben Horowitz, and I met Mark Andreison, and I had worked with them for just about a year, maybe a little bit over when they asked me to come

and co run their crypto funds at Andreas and Hearts. Again, I jumped at that chance, and I think, really that speaks to the fact that, as I've said before, things are hell yes or there are no. And it was a hell yes for me. So Andrewson Harwars is the kind of place where if you make partner, you don't leave. How did Mark and Ben respond when you said, I want to leave to start a crypto fund of my own. As you might know, Emily, Um, they're an anchor. Uh,

They're an anchor check into my fund. And I'm very grateful for that. You know, Mark and Chris and folks like them are also personal LPs um. So I felt very supported um when I shared that decision. Um. And I will say that it was not running away from Anderson Harts. It was running to another opportunity. And you know, crypto is not what do they say, It's not a spectator sport. It's like you're in it, excuse very young. It's seven, it's global, and it's hustle and at this

and that's a trade off. It's a life trade off. And at this point in my career and in my life, if I was going to continue to make that trade off, I just wanted to do it and do it in a way that was really true to me. So you struck out on your own to launch on ventures. What gave you the courage to do that? What was the spark that like the fire? Yeah, that got you to say, I need to do this and do this now. Sure.

What I set out to do was to continue to invest in this ecosystem that I think is so broad. That decision was very purposeful and the timing was very purposeful. We have an early stage fund that does seed stage, Series A, even Series B, and then we have what we call an acceleration fund, which is it's not a growth fund, it's a crypto growth fund, and I think

those are different things. But later stage it might be crypto publics um certain kinds of public tokens were set up to hold tokens to participate in the token ecosystem or later stage companies. I mean, you know there are now several crypto many crypto unicorns. Space has become really competitive. Even though you say, um, you know, crypto has had

its kind of ups and downs. The thing is a lot of people in some of those last cycles have seen the kind of venture style returns that can be had in crypto, and so you've had a lot of new funds enter space. And that's driven up competition. So what differentiates on ventures then from you know, all of these other crypto funds or even the more traditional venture capitalists like Couentries and Horowitz or Schekoia they also have crypto funds. Well, I think a lot of traditional venture

capital funds now have crypto funds. It used to just be like a regulatory designation. It was like, are you an r i A, which is registered investment advisor. I would say for crypto founders today, um, it's not enough to just be an r i A. Right they frankly, I don't even know if a lot of them care that's a regulatory designation. What crypto founders today want to know is do you live in breath crypto? Do you inhale the discords? Are you part of the community, do

you participate in governance? Are you going to be um staking these kind of crypto verbs um out there? And if you're not really in this space full time, I think it's very hard to run a successful crypto fund. We don't have a hedge fund component, so we're not sitting here buying and trading and selling. Um that's a hedge fund. Star sure, and there are crypto hedge funds. Um, we're not one. We're making seven to ten yere bets. Just how hard is it to launch a crypto fund

from scratch? You know it's hard, but it's not impossible, and we not have a crystal ball. I don't know. I can't predict cycles, but I knew that we were in a cycle where you saw so much forever an excitement around the space. And I already talked about what makes us different. But I think one thing also is we are a nimble strike force. We don't fish in the same pond we have the crypto natives. We have a fish and execution. We have operators, seasoned operators who

really know how to stick the landing. And I think that's reflected on our culture. I would say the only thing that's changed in our strategy as a result of the market correction is really more of a focus on early stage. But we still have our late stage fund and when we see valuations, which I think we'll still see correct um spoiler, I think we'll continue to see some corrections and um, so we might deploy our later stage fund a little bit more slowly. It might not

be on an even cadence and that's okay. Long term, our strategy hasn't changed. Long term, We're committed to this space. How much do you think valuations are going to correct? You know, it's just I can't give you a one size fits all answer because crypto is not a monolith. You have some crypto companies that really follow more of an enterprise sas business model. You have others that are layer one protocols UM. You have still others that are

consumer facing applications. And I think one of the things we're seeing right now is the infrastructure layer, and that's where we're spending a lot of our time, by the way, and we think more and more use cases will come about when the infrastructure layers in place. UM So, my own view is we are not rushing to deploy. We're certainly not getting caught up. Do you get VC try not to avoid that. You know, Look, I think it's very easy to get into that mindset, right. It's because

it's a competitive sport. It's a competitive space, and I think I'd be lying if I said that that doesn't influence anyone. I try to what I do, and I think I do differently is I try to take stock of that Oh, that's the foam of mentality kicking in. That's bad um. Again, you don't want to over correct, though. What we look for is we look for amazing founders.

It doesn't matter if I think valuations will correct. If there are amazing founders, there's a huge tam We also look for what's your regulatory plan if you're launching a token, what's your plan to comply with the law. What's your plan for security? By the way, we've seen a lot of hacks in the space. We want to really dive in there and make sure that the founders have been thoughtful about especially if they're custoding customer funds, keeping those

funds secure. If it's a cross chain bridge, what are the exploits? Have you changed your strategy at all given the downturn? Have you backed out of any deals? Are decided not to do certain deals because the conditions have changed? Don't you raise the fund We have decided not to do certain deals. We've never backed out of a deal. We have decided not to do a few deals because we think that pricing was ahead of progress, candidly, and we might have been wrong about that, Emily, we might

have been wrong about that. But I think if we were wrong not to do a couple of deals, um better that we might have been right, because if we were wrong about that, I think we can find a way to still invest in those projects later. Well, one thing I'm here is that a lot of dry powder has just stacked up because all these funds raised a lot of money. You raised what what? What was the biggest fund ever for a single person, not just a woman anyone. Are you confident you're gonna have to a

place to put all that money? I am, But if I don't have a place to put it, I'm not just going to go willing nearly deploy it. One of the things that we told our LPs, even during the period when we raised our fund, which was when Crypto was undeniably still on a bull run, we said that we are going to be pretty steadfast sticking to it, to your deployment cycle. Um. And you know, I think

one thing that's changed is that might have lengthened. Um. It certainly hasn't shortened, But we will again we have We feel very good that we have the capital to back greet teams when we see them. What about n f T s and are you concerned about the declining demand. We are going to increasingly live in a digital world, and I happen to think that if you live in a dual world, you're going to want to own digital goods. In that world, you're not just going to be satisfied

to rent them, which is what we do now. We buy our content from walled gardens without digital scarcity, which is what n f T s unlock. You don't really own anything. You're subject to the whims of a platform. And I think n f T s and digitally scarce goods fundamentally change that. I think you'll see n f T s back again. Um, but we are spending a lot of time in the infrastructure layer, like I tell you, zero knowledge, technologies, scalability. We think of that as like

the plumbing. If you think of the fiber optic cables, remember you couldn't have had YouTube and Netflix with dial up. You couldn't have streamed content. The same is true of crypto use cases. We think that there will be a lot of new use cases unlocked when the infrastructure is there, when it's more efficient, when it's more user friendly, and so we're spending a lot of our time there. President

buying issues. This Crypto Executive Order, there a number of ports that are coming to What do you want to see from the administration when it comes to regulation and are you optimistic that we will get there? Yeah, we were so delighted to see that executive order. This is not something you should normally be delighted about. But why we were is because it was to us a real recognition that this is the US government saying this field

isn't going anywhere. This field is growing, is growing so much that we are going to direct every single agency in the federal government to come up with a plan. Here. I think, you know, we take a step forward, but then you see, you know, we're a big government, we're a big system. We have states, we have local entities. So we take a step forward with the EO, and then we take some steps back sometimes too. And I think what I UM see as crypto founders are confused

by that. They're starting to think, well, I could go to this jurisdiction where there's a single regulator and you don't have fifty states with different rules. It's the U. S Government that needs to start taking stock of the fact that right now, Emily in China, UM there's a quarter of a billion e c N y wallets, a quarter of a billion. Um. We're still talking about whether there should be a government central bank digital currency. We're

still studying that. So you think we're going to fall behind the United I think we already are falling behind behind. We're falling behind. What are the dangers of falling behind China and the rest of the world. This is years ahead, So I don't want people to take a headline and say, oh, I think the US dollar will be you know, no longer the global currency reserve, global currency. I'm not saying

that now. But fast forward decades and if you no longer need to use the dollar because you have an alternative, Um, I think that's a real problem. What would we use instead? Well, I think that there are going to be stable coins out there that people who have access to a smartphone will use. There is a demand for it. We saw two year of your growth with stable coins, so people are clearly liking the idea of this. Now again, there have been some spectacular failures too, but not all stable

coins are created the same. But I think the important thing is that we really do need to not quahtion innovation. What do you think of how Gary Gensler, the chair of the SEC, and how he's approaching it. One of the things that I hear from founders is that they're very confused because they get told come in, register, just

come in and talk to us. But you have the one company who has done the ultimate act of going in and registering coin based filed and s one UM and still, you know, there's a lot of saber rattling still going on. I think, UM, And again, I don't want to single out the sec um, you know, and I don't want to suggest that anything they're doing is bad.

I do think though, that right now there's a lot of confusion, and one of the pieces of confusion stems from the fact that you know, and it started with the I c oh mania back in what twenty I can't even remember which year now, where the SEC was very loud about securities. A lot of them were securities. But the space has changed, and so to still view it through the I c O lens when so much has happened over the last five years in the space, UM,

I think it's a miss stake. What do you have to say that the skeptics out there who just don't believe in the future of WHIM three and don't see where this is going. I would say, don't judge the current state of innovation by the end state of innovation. I hear from a lot of these skeptics, and by the way, I'm friends with a lot of these skeptics too. I don't only want to live in a crypto bubble. They want to see the use cases, especially if they're not technical. Well, when am I going to use it?

What will I use it for? And I think one of the things that's not appreciated is how quickly the infrastructure here is catching up. And once you have kind of once you have really scalable blockchains that can handle um a lot of thoroughput on are very efficient. I think that unlocks a whole lot of use cases. People are spending more time on screens. That curve is up into the right, whether we like it or not, that is the future. I mean, those who have kids know

that kids spend more time online. They want digital things too, and I think to dismiss it, it is a bit generational. I do find not always, but is a bit generational. If you talk to kids about being able to have money online they instantly get that concept. They're comfortable not having to hold something in their hand to think it has value. Take us to the end state. Do Google and Amazon and Facebook and Apple still exists? I believe they will still exist. I mean it depends what you

talk about when you talk about the end state. I mean I think that you know, I think for decades those companies will still be around. But the important thing is, I think this new ecosystem is going to represent a challenge to them. I do think that those entities, um, decentralized forces are coming and we'll cut into those entities profits and revenues. So we have a little rapid fire section. If you could belong to any alt coin tribe, gosh, um, there is no way I'm answering that because I will

get trolled on Twitter by every other al coin tribe. Um, I'm a crypto maximalist. I'm a crypto max Alright, we'll not picking one book or podcast you're binging now, Hey, I'm I yes, I am. Oh gosh, I'm benching on wheat crash. Something that brings you simple joy, you know, one of the things that I love and I've missed being away from this summer is swimming. I just love I find like some of my best thoughts come to

me while I'm moving. Career philosophy, Yeah, do a job where you know fifty of the job and we're're gonna learn fifty percent of the job. Um. Again, that goes back to no growth in the comfort zone, No comfort in the growth zone. Studio one Point I was produced by Lauren Ellis and edited by Matthew Soto. I'm Emily Chang,

your host and executive producer. If you like us, please leave a review and check out our library of shows with the biggest influencers in tech and media, including recent episodes with Alphabet and Google CEO Sundar Pichai, Amazon CEO Andy Jassi, YouTube CEO Susan Wachitzki, and more. Thanks for listening.