Binance is one of the most recognizable names in the cryptocurrency industry. After all, it’s the leading exchange and forefront for the entire field – a place where many newcomers begin their cryptocurrency journey.
However, what a lot of people don’t know, is that apart from its popular exchange, Binance also runs a whole lot of other initiatives, each one of which aimed at furthering the cause of crypto.
One of these different avenues is Binance Labs. Those of you who are well-versed in the world of crypto VCs and angel investors have surely heard of it, but if you haven’t dived into the field of early-stage investing, it might have slipped under the radar.
In short, Binance Labs is the venture capital arm of Binance and CryptoPotato had the chance to talk to Chase Guo – its Investment Director. With a background in investment at companies such as Blackstone Group and Morgan Stanely, he also holds a Bachelor’s degree in Economics from the University of Pennsylvania.
In this interview, we discuss the intricacies of Binance Labs, their investment goals, how they choose which projects to invest in (and special tips for entrepreneurs looking to get incubated), Changpeng Zhao (CZ)’s attitude in building Binance a flat organization, and much more.
The Middleman Between 3rd Party and Binance
“As the venture capital arm and innovation incubator of Binance, Binance Labs identifies, invests, and empowers viable blockchain entrepreneurs, startups, and communities, providing financing to industry projects that help grow the larger blockchain ecosystem,” Guo explains.
“Binance Labs is committed to supporting fast-executing teams who positively impact the crypto space. Since Binance Labs is a venture capital arm of Binance, we potentially consider our portfolio companies to be listed on Binance exchange, and that some can go through Launchpad or Launchpool.
Also, many of them can work with Binance Smart Chain (BSC) to build their products. Binance Labs is kind of a ‘middleman’ who connects the 3rd party (portfolio companies) to the entire Binance ecosystem.”
What is the current focus or crypto trend Binance Labs is looking at for projects to invest in?
“Within the crypto and blockchain industry, the market changes and evolves very rapidly. This makes it hard to predict which sector will be the next focus or trend. That is why Binance Labs does not specify one sector for investments, but instead, we look extensively for blockchain projects that have the potential to facilitate mass adoption of crypto globally.
We consider putting capital into projects that match our values. We want to invest in the early stages of the projects and HODL tokens or equities for the long term and to be a supporter of the projects we invest in. Also, we would like to contribute to these projects, adding value to them, so that they can grow into industry players, just like we did with our previous portfolio companies.”
Over 100 Projects in More Than 25 Countries
Please share some statistics and numbers regarding the recent investments Binance Labs has made.
“Binance Labs has incubated over 100 projects in more than 25 countries across the world since its inception in April 2018. We are closing a number of deals regularly and this is to discover projects that can lead the market in their early stages.”
How does Binance Labs choose if to invest? What are the ‘game changers’ of whether a project will successfully receive investment?
“Binance Labs looks for top-tier teams with disruptive ideas. For earlier stage projects, the fundamentals of the team decide how the project will turn out in the future. We look for teams with good vision, strong execution capabilities, and grit. For later-stage projects, we look for strong execution in the form of operational stats and historical growth and then how they stack up against competitors in the space.
On top of that, I would like to share some questions that the Binance Labs team asks before making investments. I think individual investors should ask similar questions when they consider making investments in projects.
- How do these projects tackle adoption by users?
- Will this project change the world?
- Will people like this product when it is launched?
- What does the business model look like, and will this business be sustainable for the next 10 years?”
Besides the funding, is there any kind of support or guidance done by Binance to the projects?
“We provide full support to all projects, from day-to-day operational advice to integrations with the Binance ecosystem. We guide our portfolio companies through different products including NFT IGO, Binance Launchpad, Launchpool, listing, and more.
We have a regular incubation program that we run, and we are in the middle of Season 3 of the Incubation Program now. Season 4 of the Incubation Program will officially launch in March 2022 and projects can apply to be part of it through an application form.”
Anyone Wants to Reach CZ Can Send Him a Message
If I am a founder of a project, what tip can you give to make it and get funded by Binance Labs?
“I think fundamentals such as product-market fit, adoption of its products, and previous entrepreneurship track record are important. You also need founders who have a clear vision and mission, which will keep you and the team keeps building the product through the ups and downs.”
The Binance organization: Speaking to Gin Chao (Binance former CSO), he mentioned in his 2019 interview that Binance is a flat organization, is it still like that as of 2021? How is Changpeng Zhao (CZ) reachable in such a huge organization?
“Yes, Binance is still a flat organization. If anybody in the organization wants to reach out or talk to CZ, they can send him a message. Not only for CZ, but we also have easy access to having conversations with the senior members of the organization.”