David Goldberg

The through-line

Goldberg's consistent position is that a generalist fund only works if the generalism is disciplined. At Alpaca VC he describes himself as a "generalist fund who invests thematically" [3], and the mechanism that makes that coherent is the field study: a 90 to 120 day sprint into a market where a catalyst has appeared, ending in published opinions, frameworks and a landscape of the whole sector [1][3][4]. He is explicit that from the outside this looks undisciplined, that the portfolio of 65 to 75 companies "all look and feel a little bit different" and "you can't pigeonhole them to one sector" [3][2], and that the underlying logic is a repeated cycle of identifying "trends in a market with a clear catalyst for growth in the future that then ties to our expertise our networks or unique insight" [2].

The second thread, running through everything, is patience against a market that has stopped being patient. He tells investors to "zoom out" because "venture is a very long-term game" [1][3], tells founders to "play the long game" and build what will be valuable in three, five and ten years rather than "what the hot thing is over the last couple of months" [1][3], and warns that "most younger founders these days have only known bull markets" [1][3]. He also holds himself to the same standard in reverse: having watched the first blockchain wave from the sidelines and concluded he was too late, he built a deliberate process to avoid repeating that with the second [2].

On field studies and thematic conviction

The field study is Goldberg's answer to how a small firm enters an unfamiliar sector without either dabbling or guessing. It is a 90 day sprint of primary and secondary research, talking to founders, investors, incumbents and customers, bucketing the entire landscape, forming a point of view and publishing it [4]. The publishing step is not incidental. Once Alpaca brands itself to the external market, "people know what exactly is Alpaca looking for right now" and the deal flow follows, creating what he calls "this magnetic pole" [1][3]. His NFT field study in Q1 broke the space into infrastructure, DeFi, creator tools, digital art and collectibles, games and metaverses, then narrowed to where a fund could actually find scalable venture outcomes [4][2]. Gaming, metaverses, DeFi and infrastructure came out on top [1][3]. How the firm presents itself is something he has spoken about directly, alongside its overall approach to venture [6].

The purpose of all this structure is to buy earliness rather than access. Asked which deals he is proudest of, he rejects the usual answer: "i think like the default in like vc land because everyone like wants to talk about their access and their network so people talk about like the hot deals that they were able to get into," where what actually matters is "where did we see something that others didn't because we believed in a founder or believed in a change in a sector or consumer behavior" [4]. Imperfect Foods, then Imperfect Produce, is his example: sourced off a crowdfunding site in 2015 or 2016, the only such deal Alpaca has ever done, against the stigma and negative signal that normally attaches to that origin, because the founders were mission driven and the retention metrics were strong [4]. His summary of the craft is blunt: "the way you are really successful in this business is sort of you believe in something that the masses believe in and you just believe in it earlier than they do" [4].

On what a seed investor is actually for

Alpaca was built around a specific relationship rather than a specific sector. The intent was to be "by founders for founders partners that were really there with you on day zero," replacing or complementing friends and family, angel and accelerator capital in what he calls the formative years [2]. His reasoning is developmental: "you know like a human those first 12 to 24 months are all about dna and culture and team building and if you don't get that right it can have some real long-term consequences" [2]. That founder-first framing came from the experience he and his founding partner shared as first-time founders and from the relationships they each had with their own investors [2].

What excites him at the top of the funnel is the founder who knows more than he does. He gets most excited "when i'm meeting a founder who knows his or her space cold and inspires me on an opportunity that i didn't know previously existed" [1][3]. On whether pedigree predicts outcomes, he allows correlation but not much more: "there's definitely correlation between background and experience and outcomes uh i don't know if that's like a one-to-one correlation like there's something there but there's there's as many outliers in this business you know as there are base cases" [4].

On the state of venture and valuations

Goldberg thinks in marketplaces. Since he started paying attention in 2009, both sides have expanded together: far more capital chasing deals, but also "an exponential number of good ideas opportunities and probably most importantly great founders tackling those opportunities" [4]. Founding a company has become an in-vogue thing to do, where in 2009 his parents thought he was crazy to leave a global bank and cut his salary by 75 percent to start a tie rental company, and the field has broadened well beyond the techie oddball [4].

On valuation he refuses the "what is this worth today" framing. He raised his own seed of $500,000 on a $1.5 million post [4], and reads the gap since then through inflation, through the fact that the magic number moved from a billion dollar outcome to five and ten billion, and through ownership math: "valuations are not really what is a company worth today it's really a probability exercise and how much do i need to own and what is it valued that leads to a probability equation that i can get the major outcome that i need on the back end" [4]. He also punctures the idea that everyone is raising easily. Five years ago the rise was across the board and "almost like every idea was getting funded," which he does not think was healthy given the failure rates that followed [4]. What he sees now is bifurcation: a flight to quality where money concentrates in what investors believe are the best five or ten percent of deals and they will pay any price, while for founders without the Stanford, Uber, Airbnb or HBS stamp "it's still you know a dog fight out there" [4]. Alongside this he notes deal pace and volume that are "out of control," with faster rounds, bigger rounds, bigger funds, less diligence and large funds pushing down into seed and pre-seed, a gradual shift that exploded about a year before he spoke, offset by exits that are magnitudes bigger [1][3].

On Web3 and which inning we are in

He defines Web3 narrowly and deliberately, resisting the rabbit holes: at its base layer it is "one block chain technology right powering everything and two decentralized organizations and power structures which create new business models and new incentives for both users as well as creators" [2]. On maturity he splits the technology from the ecosystem: the technology is "probably in like the fourth or fifth inning," while "the use cases the ecosystem and everything around it is maybe in the second inning" [2]. Current applications are experimental scaffolding rather than the real thing, the sort "we will likely look back on one day and be like i don't know what we were doing or why we were doing it," useful mainly to get people familiar with the technology [2]. Elsewhere he frames the two big shifts as infrastructure finally catching up to "the vision and the utility that we were all pitched on five and 10 years ago," and the culture moving out of small inner circles toward the mainstream [1][3].

His leading indicator for the next 12 to 24 months is not technology at all, it is people. Some of the greatest talent he knows is flocking to the space from technology, finance, legal and creative fields, and "following the most talented people is probably the strongest leading indicator, you know, of where we should be investing in the future" [1][3]. He also refuses the polarised debate around the sector: outsiders "only see the extremes," while the reality sits in the middle, with adoption arriving in parts of an organisation gradually rather than replacing anything overnight [2].

On infrastructure, on-ramps and the portfolio

Alpaca's Web3 thesis has two legs. The first is infrastructure, on the logic that "if this entire space grows and scales there will be natural winners of the pipes even if we can't identify some of those specific applications" [2]. The second is a small number of consumer-facing applications chosen because he believes categories like gaming will be "the on-ramps into the broader ecosystem of web3" [2]. He is candid that he approaches the sector "from a consumer angle, not a deeply technical one given my background," which is why consumer tools, games and virtual real estate are where he is personally most interested [1][3].

The investments map onto that framework. The Sandbox is the metaverse and virtual real estate bet [2]. Rare Circles is the B2B on-ramp, "sort of a squares space for NFTTS" giving Fortune 500 companies with loyal built-in communities lightly customisable, templatised tools to mint, transact and run a marketplace as a service, building a bridge for users who are not crypto native [1][3][2]. Upstream began as a Web2 community tool taking on LinkedIn and moved into a DAO-in-a-box product: legal formation, member onboarding, contributing ETH or another cryptocurrency, voting, governance and wallet connection in one place [2]. The fourth is a strategy sports game that Alpaca incubated [2]. On DAOs specifically he sees the variety as proof of how early it is, from the effort to buy the Constitution, to a friend's LinksDAO building a Web3 version of the modern golf country club, to content sharing communities, to what look like traditional fund structures and investment clubs, and expects the use cases six months to two years out to be startling [2].

On what makes a metaverse real

Goldberg is dismissive of the proliferation of walled worlds. He has been pitched or seen 30 to 40 siloed metaverses, and applies plain economics: "simple economics 101 and supply and demand will tell you that that's not going to work out well," with continued supply growth and insufficient demand meaning many of them disappear [2]. He prefers the platform approach that pulls in different people, communities, projects and chains [2].

His test for whether one survives is whether it becomes "a full-fledged ecosystem" with people playing distinct roles, creators, spectators, contributors, comparable to a social network where Twitter fails if nobody produces content or if everybody produces and nobody engages [2]. Without that circular economy, "you're really looking at like a speculative type asset" [2]. What makes the idea genuinely interesting to him is employment and access: in a semi-anonymous decentralised world, problems of equality, inclusion and geographic access begin to even out, and play-to-earn games like Axie Infinity, where people in some Southeast Asian countries have earned above local minimum wage daily, are an early and imperfect glimpse of that [2]. He is honest about his own resistance to the premise, saying it took him a while to get comfortable with living behind avatars, and that at 40 he finds some social networks a lot, but he reads the behaviour of other countries adopting earlier and of younger users, including his five-year-old inside Roblox, where the limitation is that in a Web2 version she cannot own anything [2].

On how to learn a new sector

His advice to investors entering unfamiliar territory has three parts and he applies it to himself. First, "be a sponge and learn as much as you can," given how much good content and how many differing perspectives from investors and founders are available [1][3]. Second, get inside the actual communities: "don't just talk to investors about what's interesting. Talk to customers, talk to under founders, understand product, meet them where they are, which is often Twitter, Discord, Telegram, WhatsApp" [1][3]. Third, zoom out, because it is easy to extrapolate a hot trend from a short window while things come and go [1][3]. For anyone intimidated by the on-ramp into crypto or the metaverse, he reduces it to two moves: absorb and learn by joining communities, which can be a project Discord or just a text group of seven or eight peers learning together, and then actually get involved and try [2].

His own path in was exactly that, and expensive. He had watched NFTs casually since CryptoKitties as an early venture application, admits he is "usually afraid to dip my toes into things unless i really think i know it well or have an advantage," bought his first NBA Top Shot in February, did well, then put real money in and "got absolutely crushed um paying my dues and paying for the learnings" [4]. ZED RUN, the virtual horse racing platform where he built a stable of around 60 horses, is what convinced him there was consumer substance [4]. Only once he saw a genuine shift in individual behaviour, and even while doubting that individual NFT projects were venture backable, did he convert personal curiosity into a formal field study [4].

On the practical strangeness of investing in crypto

Both sides of the table have to rethink norms. Startups and venture have always run on playbooks, "how to raise from who, what are the timelines, what should your deck look like," and crypto disrupted that with different structures and different players including ICOs and internal tokens used as currencies [1][3]. The founder's job becomes managing several constituencies who think differently and keeping them aligned [1][3]. Investors face the mirror image, needing to be thoughtful about "can we hold tokens? How do we do it? What regulatory or legal things do we need to take into account" [1][3]. He also admits to the pace problem, that while investing across several sectors he finds blockchain and crypto "moving at warp speed" and often finds himself playing catch-up [1][3].

On the job of a venture investor, and career advice

Goldberg tries to talk aspiring VCs out of their assumptions rather than out of the job. "I would say like really think about why you want that role," because there is a lot of misconception about the day to day: he spends much of his time fundraising, on operations and admin, on team building and management, and on helping portfolio companies, and as one of three partners will do only two or three deals a year [4]. It is "definitely not as glamorous as i think people make it out to be and it's also not as lucrative," requiring very large wins to approach what a founder or even an early employee at a successful company can make [4]. What he values instead is exposure, the people he meets and the accumulated learning from roughly 67 or 68 investments, around 15 of which he works closely with, each contributing to the knowledge base he underwrites new deals against [4].

For anyone wanting to found a company or be an early rocket-ship employee, he ranks experience above credential. Business school and a stint at Amazon, Facebook or Microsoft are roughly equivalent in his eyes, teaching some hard skills, conferring a stamp of approval and building a network, which he rates "somewhat of equal value which is sort of low to mid" [4]. "There is no substitute for being inside a startup as it's scaling from like zero to one or one to a hundred," and the treasure trove that Facebook represented eight or ten years ago has largely passed [4]. Hard skills can be learned in banking or many corporate or startup roles, but the osmosis of watching a company happen cannot be replicated. His own admission is the argument: "i thought i knew what i was doing a little bit when i built my startup and now that i've seen it happen both in my own and now in all my investments i had no idea what i was doing right and i could do it ten times better today" [4].

Takeaways

• The field study is Alpaca's core mechanism: a 90 to 120 day research sprint into a market with a visible catalyst, ending in published frameworks that pull matching deal flow toward the firm [1][3][4].
• Judge a fund's coherence by process, not sector labels. A portfolio of 65 to 75 companies that "all look and feel a little bit different" is intentional if each entry came from a catalyst tied to the firm's expertise, network or unique insight [3][2].
• Technology and use cases mature at different speeds. Goldberg places Web3 infrastructure at the fourth or fifth inning and the surrounding ecosystem at the second, which is why he backs pipes first and only a few consumer on-ramps [2].
• Where the best talent migrates is his strongest leading indicator of where to invest next, ahead of any technical signal [1][3].
• A metaverse survives only as a circular economy with creators, contributors and spectators playing distinct roles; the 30 to 40 siloed worlds he has seen fail on simple supply and demand [2].
• Valuation at seed is a probability exercise about ownership and outlier magnitude, not a present-day worth, and the market is bifurcated between a top decile that can name its price and everyone else fighting to raise [4].
• The proudest deals are the early non-consensus ones, like sourcing Imperfect Foods off a crowdfunding site despite the negative signal, because success comes from believing what the masses will believe, earlier [4].
• For aspiring founders and operators, time inside a startup scaling from zero to one or one to a hundred beats an MBA or a big-tech stamp, both of which he rates low to mid [4].