Just a day after its official public listing, Coinbase is already creating multi-billion-dollar success stories. The popular angel investor and founder of Initialized Capital, Garry Tan, told his story in which he turned a $300,000 invested in Coinbase upon the company’s launch into $2.4 billion.
Tan’s Initial Story with Armstrong and Coinbase
Long before Coinbase became the US’s largest crypto exchange and be valued at about $100 billion, Brian Armstrong’s brainchild had a more modest start. In fact, it even had a different name – Bitbank.
Tan’s story began after receiving an email from Armstrong in which the latter said he was “coding like crazy” for weeks and was looking for a cofounder. Tan’s initial advice urged Armstrong to “show people that what this could be is much bigger than what else they’re doing.”
He continued cryptically, adding that “you already know your future cofounder. They just don’t know it yet.” Although Tan admitted that no one really believed in bitcoin back then – the only asset Bitbank supported – he was actually a fan of Armstrong and did him a favor.
More specifically, Tan ranked Armstrong an infinite score in YC’s admissions software, which ensured the latter’s acceptance into the program. When he attended it, though, the company already had gone through a name change – from Bitbank to Coinbase.
Tan admitted that most people averted from investing in Coinbase initially; however, he saw massive potential mainly because of the lack of adequate solutions. After all, BTC had already existed for a few years. He had a “terrible experience” trying to buy bitcoin from Mt. Gox, so he decided that he should be involved in a project promising to facilitate the process.
Belief in Bitcoin; Disbelief in Dollar
Perhaps the most significant reason why Tan wanted to help in making bitcoin more easily accessible was his doubt in the dollar’s future value. He referred to President Nixon’s infamous act where the 37th POTUS removed the greenback from the gold standard.
By doing this, the USD became a “printable at will” fiat currency. In contrast, bitcoin is a pre-programmed asset with a fixed supply that cannot be enhanced with politicians’ signatures. Furthermore, its issuance decreases every four years after an event called halving, which reduces the inflation rate as well.
Enjoying a 6,000x ROI
BTC’s merits, combined with Tan’s firm belief in Armstrong as a “builder,” convinced him to become a vital part of Coinbase’s start and future. Ultimately, Tan allocated a substantial amount of $300,000 in Coinbase.
As reported yesterday, less than a decade later, the exchange went public through a direct public offering. According to several sources, including Bloomberg, Coinbase became the largest direct listing in history with a valuation of about $100 billion.
Naturally, this meant massive returns for stakeholders. Tan indicated that his initial investment had delivered a whopping ROI of 6,000x, meaning that it was worth a mind-blowing $2.4 billion.
Featured Image Courtesy of Bloomberg