- Samantha Lewis is a principal at Mercury Fund and invests in Web3 and fintech startups.
- Founders need to have conviction rather than focus on building hype about their company, Lewis says.
- She’s interested in companies building tools bridging the divide between Web2 and Web3.
Despite the recent downturn in crypto markets, VCs still see a lot of potential in Web3 and continue to invest in the space.
Mercury Fund, a Houston, Texas-based venture capital fund, which invests in companies in middle America, has begun to look at Web3 startups to expand the scope of its “power” theme – a focus area that revolves around rethinking how individuals access capital and build wealth.
Samantha Lewis, a principal at Mercury Fund, leads the firm’s investments around this theme and is one of the first there to seriously look at Web3. Lewis offers up the qualities in founders and startups that she looks for when considering an investment in this sector.
“I’m focused on how all the investments we do are solving the unsolved problems that exist, whether in financial markets or in how we get mass adoption in Web3,” she said.
Lewis has been looking into Web3 and blockchain in 2017. In addition to working with Web3 companies, Lewis also invests in B2B
Mercury Fund, which manages $1 billion in assets, has invested in blockchain-based ESG verification company Topl, retail startup Cart.com, and beauty ecommerce platform Upgrade. Before joining Mercury Fund in 2020, Lewis was an
angel investor
in Topl and joined its board of directors. Mercury Fund led Topl’s seed round in 2020.
For startups looking for an investment from Mercury, it’s important to understand the firm’s vision of catering to sectors that are often neglected, Lewis said.
“Being able to help the people who sometimes get forgotten about and left behind when it comes to the value being created is key,” she said.
That means, first and foremost, startups need to do their research. She said Mercury Fund researches every potential investment to ensure there’s no invented hype, and startups should do the same.
Startups bridging the gap between Web2 and Web3
Since Web3 is a new space for Mercury, the fund wants to see companies that bridge the divide between Web2 and Web3 technologies. The strategy here is to see how legacy businesses can reap the innovations provided by Web3.
“There are some really valuable companies in Web3 that allow people to control their data and do trustless transactions,” Lewis said. “Web3 can enable so much for companies that are traditionally Web2 companies. More importantly, companies have to prove they are solving urgent problems for customers.”
Founding teams matter
As with many VCs, Lewis looks for founders she believes in. However, she said founding teams become even more critical when it comes to Web3.
“So much of the crypto and blockchain world is still solving new industry challenges,” she said. “The founding team must be undeniably obsessed with the space, their community, and their solution – like live and breathe Web3 obsessed.”
But that doesn’t mean any founder with a passion for Web3 immediately gets Lewis to cut a check. She warns innovators that building a successful company shouldn’t just be about personal monetary gain–a creed she also holds for startups outside Web3.
Lewis said Mercury Fund likes to work with founders who don’t focus on building hype, but are more concerned with building long-term customer value.
Big mistakes that founders make
Lewis said she’s noticed many founders, especially those in Web3, have difficulty distilling their product “to a message that makes sense.” While she understands that the space is new, Lewis feels this is a big mistake as it doesn’t give investors a good view of a startup’s offerings.
Founders should make sure that they understand what they’re trying to solve and are not create artificial fear-of-missing-out.
But Lewis distills the biggest lesson founders should take when pitching her and other partners at Mercury Fund.
“One of the biggest mistakes founders make: being an asshole,” she said.
