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Garry Tan was among the first in the VC space to lend a check for working capital as demand for the Coinbase App soared in the early days of 2013.
On Wednesday, April 14, Coinbase (COIN) stock debuted on the Nasdaq exchange with the company’s listing valuations at $86 billion. Coinbase is the first major crypto business to debut on Wall Street and thus the euphoria in the crypto community was high. COIN stock debuted at $381 per share and closed at $328 in a choppy market on Wednesday. However, it is still 30% higher than Nasdaq’s reference price of $250. Let’s take a look at some of those investors who made a fortune betting on Coinbase in its early days of Silicon Valley. Back in 2013, Initialized Chief Capital Garry Tan saw an early opportunity in Coinbase.
Even in its early days, the Coinbase app was unable to handle the transaction surge. Thus, it was in an additional need of working capital that can take care of the demand. Seeing this, venture Capital Initialized agreed to quickly wire a $200,00 check to Coinbase.
In a letter last year, Tan wrote:
“I was their first check into their seed round at Demo Day”.
“It sounds like a small thing, but at that time I really didn’t feel confident negotiating with investors. Garry gave me the right words to make it happen.”
It looks like at the current valuations of the company, Tan’s investments have got a handsome reward. Tan also recalls the early days when Coinbase was BitBank.
Garry Tan and His Coinbase Investment
Tan recalls Armstrong showing him the product demo sending 0.01 BTC. In an email to CoinDesk, Tan wrote:
“When I first heard about crypto on Y Combinator’s Hacker News, I thought it was software eating money. When software eats anything, it’s a big deal: Airbnb, Uber, etc. I thought it would be an alternative to Visa and international remittance, as a medium of exchange.”
Tan said that he first came across Armstrong when the Coinbase CEO was working at Airbnb. This happened as Armstrong was one of the big customers of anti-fraud startup SiftScience. Tan said:
“I heard that the Sift founder Jason Tan and Brian Armstrong were up until 2 a.m. debugging a problem with the software. That’s exactly what great engineers do – they’re great at the craft”.
Tan is one of the big names in the venture capital space, especially among the Silicon Valley-based crypto startups. During the early Coinbase days, Tan’s partner and Initialize co-founder Alexis Ohanian also led a helping hand. Tan said:
“Alexis, [Y Combinator General Partner] Harjeet Taggar, and I all worked on the Coinbase deal, though I was the primary contact at YC and Initialized. Alexis specifically helped promote Bitcoin and Coinbase and helped to introduce crypto to more press. I definitely helped him buy into the Ethereum presale, which was a powerful moment in crypto.”
Just like Garry Tan, there have been many other players from the funding space who laid a helping hand to Coinbase in its early days. Here you can find a list of all those investors currently counting cash as Coinbase goes public.