Risk and investment strategies with Shima Capital

Venture capital has been a key driver for myriad startups in the blockchain space. Founders know how competitive it can be to secure valuable VC funding that can keep the lights on and employees paid during the critical first days of a new project.

In a new interview series, Cointelegraph sits down with executives at some of the most active funds investing in the crypto space to understand their perspectives, hear their successes and failures, and know what gets them excited about a new project in the Web3 space.

This week, Cointelegraph spoke with Shima Capital’s founder and managing general partner, Yida Gao. He founded Shima Capital in 2021, and the fund has since been very active, investing in nearly 100 projects. Gao is also an adjunct professor at the Massachusetts Institute of Technology.

Cointelegraph: Shima Capital was founded relatively recently, yet the firm has already invested in some of the most prominent projects in the crypto industry. As of now, which investment would you consider to be the most successful?

Yida Gao: This feels like asking a parent to choose their favorite child! I would say it’s still too early to make that call, as you alluded to. We definitely have a few that have performed pretty well and attracted good traction, such as Wombat Exchange, Berachain, Magna, Monad Network, etc. We’ve also incubated several projects that we will announce soon. For now, we’re proud of all the portfolio companies for pushing through this continuing bear market. So, the fact that they’re still standing means they’ve successfully navigated one of the toughest situations they’ll ever face.

CT: Who were your initial investors, and how did you persuade them to invest in such a high-risk industry?

YG: Although some of our own investors were named in earlier announcements, we’ve since taken a more personable approach and prefer to respect their privacy. That said, I’ve been in the finance and venture space for a decade, so I have a track record in both traditional and Web3 investing. I believe having navigated through the ups and downs in terms of the market and market sentiment played a key role in gaining the trust of some of the most successful investors in the world.

CT: In the early days of Shima Capital, how did you attract your deal flow?

YG: Although Shima Capital itself was new, and still is to a degree, I — having been around the space since 2015 — have tried to build a strong global network and reputation in the…