Crypto VCs missing out on ReFi

There was a time in my professional life that I believed VCs walked on water especially after obtaining my PhD in entrepreneurship at the University of Colorado (2001) and also pitching one of my startups in Silicon Valley in 2006.

Fast forward to 2017 when I published my 3rd book where among many other things, I proposed that DAOs would end up overtaking VCs as a more decentralized and inclusive approach to venture funding. Maybe this will happen but VCs have remained front and center, outside of crypto and inside it too.

Despite my own willingness to challenge the supremacy of VCs, I also find myself still seeking their validation. Iomob, a company co-founded in 2018 to decentralize and tokenize the transportation and mobility space, has raised funds from traditional VCs and accelerators like Techstars. We have also received funding from crypto VCs like True Global Ventures. We have not yet received any funding from DAOs.

I am a crypto podcast addict. When I say this to my colleagues they often wonder aloud how I could possibly have the time to dedicate to listening to 10 hours+ of podcasts per week. The answer is: my very sustainable and enjoyable bike-train-walking commute to my office, plus my multiple hours of mountain biking on the weekend, and every other time on my own outside the house (walking the dog for example) is spent listening to my favorite mainstream and ReFi podcasts including: Bankless, Empire, Refi Podcast, The Ownership Economy, Green Pill, Planet of the Klimates, The Breakdown, Epicentre and Unchained among others.

On my Sunday mountain bike ride I listened to a few of those including the weekend episode of Unchained. Unchained is founded and hosted by Laura Shin, a respected crypto journalist. The Chopping Block is a version of Unchained where a few times a month, respected VCs and technologists from crypto come together to debate the latest developments in our industry.

I almost always enjoy the banter and perspectives from each of them even if I do not always agree. But listening on my bike on Sunday I must say I was quite disappointed to hear the dialog when they spoke about what was happening in ETH Denver this year. (Check out around 2:40)

A comment was made that there was so much fluff and BS being discussed such as the ESG non-sense and the so called regenerative finance (ReFi) space. The actual quote was that ETH Denver was full of

“Pseudo ESG propaganda. Regenerative finance stuff….”

Let’s do a short summary of what is going on with ESG in the world.

• Climate change is finally being recognized as one of the biggest threats to human survival
• Due to the size of the opportunity, venture funds have sought to capitalize on the ESG trend.
• More than $1 trillion in venture funds were declassified due to false claims of ESG impact. (Note: that is the size of the entire crypto industry!)
• Similarly, The Guardian recently published a scathing investigation of the voluntary carbon markets providing evidence of substantial exaggerations and false claims due to the opaqueness of the carbon offset programs using the Verra voluntary standard
• Meanwhile the Gold Standard is now embracing digitized and tokenized carbon offsets through engaging with a handful of, you guessed it, ReFi projects working to solve this challenge.

So let me ask you a question. What could possibly be done to help the thousands or millions of companies and governments around the world gain more confidence in the claims associated with the origination, sale and retirement of carbon offsets? Hmmm.

Could it be that the Gold Standard has a clue about the right direction, and leveraging the “pseudo propaganda”, AKA ReFi space within crypto, could provide the transparency this space needs?

Given the past few years of speculative bubbles and scandalous 3 letter acronyms (e.g. FTX, SBF, 3AC), perhaps the mainstream crypto industry, and the VCs that help it grow, should make more of an effort to learn and understand what we are all up to in the ReFi space as we seek to leverage crypto rails for real world global impact. I recently put together a primer for those seeking to go down the ReFi rabbit hole. Maybe we can get our friends at the Chopping Block to join us.

About the Author

Boyd Cohen is CEO and co-founder of Iomob, which is building the Internet of Mobility network and WheelCoin Move2Earn to gamify green mobility and is a contributor on ReFi to CoinDesk. Since obtaining his Ph.D. in strategy and entrepreneurship at the University of Colorado in 2001, he has spent the past two decades focused on accelerating the path to a low-carbon sustainable economy. He has published three books, multiple peer-reviewed articles and started a handful of ventures in the smart cities and sustainability arena.