This week, Q Inc has changed course with speaking with investors. Given I receive a lot of cold opens from investors on Farcaster, I would like to share that change with everyone publicly, and why.

Moving forward, we refuse to even begin conversations with funds who have ever (or intend to) engaged in token warrants. It is clear our values and beliefs are diametrically opposed, and this is a far easier filter to save ourselves the time. 

It has been a long path to fundraising principally because we are operating from a perspective that as a company collaborating on a fair launched project, we can not and will not do token warrants. Despite being upfront about this, this topic has resulted in a lot of time wasted in talking with crypto funds, because they do not believe equity has a path to return for them, and ultimately decline.

This is very telling because if they don't believe the company will be successful what use are the tokens, unless...?

BDFL of Quilibrium, Eng @ Farcaster, ex-Coinbase, always opinionated, never hydrated

/quilibrium

So, they do not believe it or get it, and I do not have any more time to spend trying to explain how a company can help build a protocol and make money without being a scheme for dumping on retail for revenue.

And so they're out, permanently. Don't let the door hit them where the bad thesis split them.

But wasted time does not warrant a diatribe, rather a pithy "pick investors that align with your principles", so why this post? Because founders on here should understand what some of the funds are doing, as I and others, who I will keep anonymous, have learned the hard way that "no" is not the worst that can happen.

On the darker side: a fund who with a strong presence here whose GP had an openness to equity deals and spoke against the abuses of VCs with respect to tokens, for several rounds of talks, ultimately passing on the round (fine) due to being too ambitious (coded for "they don't think it'll work", a soft no, still fine) – that would be a reasonable thing to say, if it was left there, there's always room for "no". Nos are healthy.

What was not reasonable, was in the same message, a member of the fund _immediately_ following that up by asking for help in running nodes in order to earn tokens and offering a far smaller quantity as an "investment" in exchange. Ironic, hypocritical, unethical – these words do not speak strongly enough to the situation.

But before someone comes here scrambling to defend their fund thinking I've singled them out: I was general in my choice of words describing actions here, because it wasn't one fund that did this. Three did.

There are many founders that have been blindsided, because they took the bait and accepted a token deal and only after the fact did they have counsel who told them plainly they:

1. cannot fulfill that warrant with a token available to folks in the U.S., and
2. have screwed themselves out of doing a fair launch.

And if they act against that guidance, they find themselves embroiled in legal hell, while the people responsible for making this happen have already skipped away free and clear with their winnings. They were sold a bill of lies that this is the "right way" to do crypto.

There are many honest actors that are currently caught in this trap and they know it, but they dare not speak it out loud, because now that they're on the treadmill, telling the truth means they'll be flung off with no hope. This even includes members of some prominent funds.

Understand the core problem with their thesis: their interests are aligned not with the health and value of a company they invest in, but the value extraction they can obtain from the token. This relationship is negative for crypto, because instead of aligning on building a business that brings value to the ecosystem and benefits all rather than a privileged few, it is focused on rapid concentration of value from speculation and expeditious stripmining of it.

Their actions prove this over their words.

This thesis has been a plague on this industry. If you wanted to find one thing that singlehandedly has caused more retail wreckage than all else, you need look no further. And it's unbelievable to me how what started as a reaction to the failures of institutional finance has been fully coopted by the same behavior. I would strongly encourage folks to look through the portfolios of crypto funds on their websites – but compare it via the internet archive. You'll learn a lot.

So what does this mean for Q? Nothing.

If there are ethical investors in this space that agree with our position, we're still happy to chat. If it means I have to bootstrap this company because this bridge conflagration of a cast engulfed the entire collective of crypto funds? I'll do that. This is a crusade, not an "incredible journey".

If you're a fund and feel these casts were about you, go ahead and let us all know that in the replies. It spares me the effort of the name and shame, and I've got receipts anyway.

If you're a founder that wants to make a change in this industry? Join me on this crusade, and set the same standard: no crypto warrants, only fair launches.

Let's make this industry cypherpunk again.

Fool me once, shame on you. Fool me twice, shame on me. Fool me thrice, I'm an idiot for continuing to have faith any crypto VC is telling the truth that they're somehow different.

This doesn't even include the number of funds that have cold opened by acknowledging my POV and then following with an offer to buy $QUIL. This also excludes where conversations went with a fund for a year, how they were willing to move forward, how much they believed (all while they were spinning up nodes) and respected the ethos, hoping I would be strung along enough until the money ran out, and, out of desperation, I would agree to a token deal. As they discovered, I would not.

Saying No but still want to set your term, they can’t have refuse the cake and still eat a piece