Recap · August 4, 2025 · 1:00:26
Smac: How To Make It, AI Girlfriends, Market Uncertainty | TG Podcast
The Signal
Smac, an investor at Compound, describes a crypto venture practice built around using products, candidly assessing whether they solve a problem, and raising only enough capital to reach a concrete milestone. The conversation moves from crypto's access case and AI companions to the uneasy current market, a trader's journal, and why newly successful onchain traders should treat angel investing as tuition rather than a second trading strategy.
Key Takeaways
- 01
USE PRODUCTS FIRST
Smac spends his days meeting founders, using new products, writing, and keeping up with macro. A compelling pitch starts with a real problem rather than a narrative that is already crowded.
- 02
CRYPTO'S ACCESS CASE
He sees onchain finance as a way to flatten an unequal starting point for people with internet access, while acknowledging the survivorship bias behind spectacular meme-coin wins.
- 03
SMALLER RAISES, CLEARER GOALS
His advice is to fund 18 to 24 months of work against a product and user milestone, rather than raise a large fund simply because capital is available.
- 04
WRITE THE TRADE DOWN
A running record of positions and reasons prevents hindsight from rewriting a trader's prior view and makes subsequent review possible.
- 05
ANGEL CHECKS ARE NOT A SHORTCUT
For a trader, early investments can be useful for learning and relationships, but Smac says they should be budgeted as tuition rather than assumed to compound trading gains.
On the Record
“Probably if you have something that like actually solves a problem, cool, done.”
“I do think it like directionally does does do that.”
“You should raise as little money as you need as possible.”
“To me the best traders always have a journal.”
The Breakdown
What a Compound investor actually does
Smac describes venture work as deliberately unglamorous: use new products, talk to builders, keep up with Telegram and macro, help portfolio founders, and spend roughly 30% of a day in pitch meetings. He tries to bunch meetings into three or four days so one day remains for reading and thinking. At Compound, he focuses almost entirely on crypto while the broader team also works in AI, machine learning, robotics, healthcare, synthetic biology, and computational biology.
A pitch needs more than a narrative
His simple test for a founder is whether the product actually solves a problem. He says crypto quickly repeats whatever narrative has recently worked, leaving a late pitch to compete with an idea someone began pursuing a year earlier. That skepticism extends to venture itself: he calls the sector cliquey and says funds rarely state openly when a product has no users or a return has disappointed.
The access argument, with a caveat
Asked what crypto can solve beyond store of value and stablecoins, Smac points to global access. In his framing, onchain systems can reduce the advantage conferred by the country or financial system someone happens to be born into, assuming they can get online. He also mentions decentralized physical infrastructure as a possible way to coordinate projects such as energy buildouts. But he does not confuse access with guaranteed outcomes: behind a 1,000x or 10,000x meme-coin winner, he says, are many people who went to zero.
AI companions and an overfunded VC cycle
The AI-companion discussion is uneasy rather than promotional. Smac calls the current wave a possible necessary evil on the path to useful applications such as therapy, while worrying about attention being consumed by increasingly effective slop. Back in venture, he traces crypto VC's reputation problem to 2021 and 2022: oversized funds had to deploy, private price discovery pushed tokens to extreme FDVs, and public buyers inherited assets they did not want.
Fund the milestone, not the celebration
Smac prefers a smaller early check and an 18-to-24-month plan: specify what the product and user base should look like, then raise the minimum required to reach that inflection point. A raise or token generation event may deserve a celebration, but he says it is not the end of the company; it is when building begins. He expects more IPOs as the window reopens, while joking that a glut of treasury companies and public listings would become a signal to start selling coins.
Narratives, uncertainty, and the written record
He thinks crypto's thinner fundamental anchors make charts, momentum, and narratives especially influential, and sees traditional retail markets drifting in that direction too. Although he expects a generally favorable second half, he is less certain about markets than in prior years. His practical defense against reactive trading is to write views down before headlines arrive. Reviewing those entries later exposes whether a thesis was genuinely held or merely reconstructed after the fact.
One big trade and expensive tuition
Smac contrasts high-frequency onchain activity with the possibility that a trader only needs to catch a few large inflection points—he names Solana and HYPE—to have a strong period. He finds sharp smaller accounts by noticing thoughtful replies and group-chat contributions, and thinks improved regulation has lowered the career risk for outside talent entering crypto. Finally, he advises a trader considering angel checks to make them for curiosity, products, and relationships; if they are made at all, assume the money is the cost of learning rather than a dependable return engine.
Distilled from the episode transcript · Counterparty Recap Desk
