DBA Crypto, one of the most hotly anticipated cryptocurrency fund launches of 2022, is still trying to get off the ground, according to June SEC filings and two sources familiar with the matter.
The institutionally geared investment startup brought together a deeply credentialed team in a bid to raise at least $500 million of outside capital — and the goal was to launch toward the end of 2022 or the beginning of 2023. Three of those core staffers have since moved on to other crypto ventures.
Sources at the time told Blockworks that DBA was engaged in advanced conversation with potential anchor investors, and it’s known that established crypto investment managers were among those considering supplying DBA with day one capital.
That plan did not pan out.
The New York-based startup slashed its half a billion dollar fundraising to $150 million, according to two SEC filings, an amount split between an onshore and an offshore version of its flagship DBA Crypto Fund 1.
Filings, as well as one source, indicate that DBA is led by Michael Jordan, formerly Galay Digital’s co-head of investments, alongside Jon Charbonneau, an alum of Delphi Digital and Deutsche Bank. Both hold the titles of managing member, per the filings.
DBA initially set out to pursue a joint investment approach encompassing both digital asset venture plays and liquid strategies, including derivatives, sources said.
On board at the time were Josh Lim, who left his post as Genesis’ head of derivatives in August 2022 to join DBA, and Roshun Patel, who also worked for Genesis. Lim and Patel, alongside the quant Shane Barratt, had signed up as DBA partners.
Lim has since joined another crypto operation, and Barratt in April took a job as an algorithmic trader for Tower Research Capital, according to one source and his LinkedIn.
Meanwhile, Patel became a partner at Hack VC in February, according to his LinkedIn.
Patel declined to comment, and Lim and Barratt did not reply to a request for comment. Current DBA executives did not return multiple requests for comment. Sources were granted anonymity to discuss sensitive business dealings.
Venture pivot
DBA faced an unexpected and serious wrinkle in trying to raise capital just as digital asset markets collapsed in the fourth quarter of 2022.
It went down as one of a number of high profile new investment initiatives that faced an unexpectedly tall task in terms of raising the amount of capital they were projecting — and perhaps expecting.
“A lot of the funds in the space are not in a good position at all, mostly because no one is able to raise capital,” one source said. “A hedge fund can’t operate under $100 million, because it doesn’t really cover your costs.”
In DBA’s case, sources said the three partners parted ways with the firm, at least in part, because of a pivot in strategy. That approach placed a premium on crypto-native venture style investing, which would focus on both traditional equity plays and protocol stakes.
“This is not a crypto index fund,” DBA wrote on its updated website. “Our mission is to identify fundamental growth, invest in its category kings, build alongside this concentrated portfolio, and manage the associated risks.”
One of the sources said DBA has been pursuing a concentrated equity strategy designed to hold a handful of names. Jordan and Charbonneau echoed that sentiment on DBA’s website, writing that there are “usually 10-15 interesting things being built at any time in crypto, so we want to focus on them.”
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Source: https://blockworks.co/news/dba-crypto-slashes-fundraising-goal