In this interview, Qiao Wang, Alliance’s co-founder and well-known crypto industry investor, shared his investment strategy in the Crypto field. Alliance currently mainly invests in ultra-early stage projects with a valuation of several million US dollars. He gave a detailed introduction to this round of investment and incubation in PUMPFUN, which has obtained at least 1,000 times of return; and investment in MOONSHOT, which has obtained more than 100 times of return. The key to the success of the PUMPFUN project lies in the youth and innovation ability of their team. He said that the biggest change after Trump took office was that he would not appoint the SEC chairman and the Secretary of the Treasury who were hostile to cryptocurrencies, and the entrepreneurial sentiment would immediately improve greatly.

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Introduction to Qiao Wang

Colin:

OK, you’ve gained a lot of recognition recently in the English-speaking world, including in the VC sector. Although your influence in the Chinese community may just be starting, attention from there has increased over the past few months, especially with the rise of memecoin-related projects. So, we wanted to invite you on this podcast to discuss this field. Why don’t you start by introducing yourself, including your background and how you got into crypto?

Qiao:

I was born in Jinan and immigrated to Canada at the age of 12. After graduating from university, I went to the U.S. to work. I spent the first six or seven years of my career in traditional finance doing high-frequency trading. In 2011, a colleague introduced me to Bitcoin. I didn’t buy it then, but in 2012, another friend encouraged me to try investing, which got me seriously looking into crypto. In 2014, I participated in Ethereum’s ICO. That was my early foray into crypto investing, personally, albeit with similarities to VC involvement.

In 2017, I joined Messari, where I oversaw the company’s product line and built the tech team. After working at Messari for three years, I left in 2020 to start my own venture, founding Alliance, a crypto incubator, which I’ve been focused on ever since.

Colin:

What led you to decide to start your own venture?

Qiao:

In my last year at Messari, our products, especially the B2B products, were doing quite well. People thought Messari primarily focused on consumer-oriented research and analytics tools, but our real strength was in the B2B side. By then, we had found our product-market fit. I love the 0-to-1 stage of building a business, but once it reaches 1, scaling it from 1 to 10 becomes less enjoyable for me. So, after Messari, I kept thinking about how I could keep doing 0-to-1, possibly even fifty times a year. This idea ultimately sparked the creation of Alliance.

Alliance’s Team Structure and Investment Strategy

Colin:

Got it. At the beginning, were there several partners doing this together? What are their backgrounds?

Qiao:

Alliance is really positioned to invest at the very earliest stages, so we’re different from most VCs. We focus on deeply engaging, helping founders find good ideas, set go-to-market strategies, and plan their fundraising at the early stages. Alliance’s goal is to focus on 0-to-1 projects, helping fifty or so projects like this each year.

Our partners are very “crypto-native,” with about ten years of experience in this industry. One of my partners, Imran, is often active on Twitter, so people may know him — he was previously a professional VC. Another partner, Jacob. Then there’s Roberto, who has a Web2 background. He previously worked at YC and was one of its founders, bringing significant expertise in incubators and accelerators.

At first, we used personal funds without LPs, but as our projects and investment sizes grew, we added LPs. Currently, the team is fairly small, with around 14 or 15 people.

Colin:

OK, so does the main focus revolve around investment, incubation, and research?

Qiao:

Not entirely. We have a product team of five people, making up one-third of the company. Our investment and research teams are relatively small, just three or four people. The product team’s job is to build an internal social network for the founders of our projects, allowing them to ask each other questions or discuss topics, like their views on VCs. This has become a very interesting internal social platform. We might also develop an external social network in the future to allow projects we haven’t invested in to join.

Colin:

OK, so from the start until now, how many projects have you invested in? Are they all at the earliest stages, like angel rounds?

Qiao:

Yes, we’ve invested in about 150 to 200 projects. Four or five years ago, we weren’t only investing at the earliest stage because there were fewer projects, and crypto venture capital was limited, so we had similar investments as other VCs. But in the past year or two, we’ve primarily focused on the earliest pre-seed stage.

Colin:

OK, how big is the fund now?

Qiao:

It’s structured according to typical VC logic, where fund size changes with post-investment valuations (mark-ups).

Colin:

Based on what you said, did you start focusing more on angel or early-stage projects one or two years ago? Was that a turning point? Before then, did you see fewer very early-stage projects?

Qiao:

Yes, in those earlier years, projects were mostly early-stage, but there have been many changes in the industry in recent years. Project numbers have increased one or two orders of magnitude, and venture capital in the crypto space has also grown significantly. Under these circumstances, different VCs encounter projects at various stages, even missing some. So, we ultimately decided to focus on the earliest stages, fully concentrating on pre-seed.

Colin:

Alright, understood. Were there any particularly successful or notable projects before the pre-seed phase?

Qiao:

Quite a few, like early DeFi projects such as Stepn, Synthetix, 0x, and various “to earn” projects from 2021.

Colin:

So, would you say your investment style leans toward gaming, DeFi, or consumer-facing products?

Qiao:

Not exactly. It depends on the market trends. For instance, we also invested in several infrastructure projects, like Pyth and Arbitrum, which have performed very well, along with other Layer 2 projects. However, this year, there are many infrastructure projects, and VCs are leaning toward them, pushing valuations to unreasonable highs. So, we avoid overvalued projects. On the other hand, consumer projects, like memecoins, tend to be undervalued and are often avoided by many VCs.

Colin:

Could you share how many funds you have so far? How are the returns on earlier funds? I understand some mainstream funds in mainland China have seen 5x to 10x returns over six months.

Qiao:

We’re currently on our third fund, with the first launched in 2021. Although 2021 was the worst year for crypto VCs, our fund from that year is still in the top 5% in the industry, possibly even higher.

Colin:

Looking at things now, or from the perspective of this cycle, what specific opportunities or factors prompted you to dive deeper into the memecoin space? How involved are you with some of the well-known mainstream memecoin products?

Qiao:

In this cycle, our most successful investment so far has been PUMPFUN, which has brought at least a 1000x return. When we invested in PUMPFUN, they were actually pursuing a different direction. After trying several approaches, they eventually settled on what PUMPFUN has become today. Initially, we didn’t expect it to become a memecoin project. My idea at the time was that it could be a token launchpad, though I wasn’t sure about the specific tokens it would launch. I just felt it had potential, similar to Zora (an NFT launchpad), which had a few stable years of revenue but no tradable token. So that was the reason behind our investment decision.

As it turned out, PUMPFUN eventually evolved into a memecoin-focused launchpad. This is common in early-stage investments; you can never fully anticipate the project’s final form. But later, PUMPFUN indeed became one of the projects that helped kickstart the memecoin space. Afterward, we invested in Moonshot, with a clear understanding from the start that it would be a memecoin-related product.

Success Stories with PUMPFUN and Moonshot: Team Traits and Key Factors

Colin:

OK, what led you to choose to invest in PUMPFUN? You mentioned the need for a token launchpad, but what kind of due diligence did you do on their team? Do you place a lot of emphasis on team style and background when investing?

Qiao:

When we invested in PUMPFUN, they actually weren’t focused on a launchpad. Initially, they were building an NFT marketplace but pivoted after a few attempts. For us, selecting this team was more about the team itself, rather than the specific idea. Especially at the pre-seed stage, where the success rate of consumer-focused applications is low, teams will likely pivot, so our focus is on the potential of the team.

Colin:

Are they a Chinese team?

Qiao:

No, they’re a European team.

Colin:

Understood. Looking back at their success, what characteristics of the team made you confident in them? Was their success more about team qualities or luck?

Qiao:

Luck definitely plays a big role in successful projects, but there are also necessary factors. For PUMPFUN, the key to success was the team’s youth and innovation. Many people had considered this idea, but only PUMPFUN’s team could bring it to fruition. One reason, I think, is that they’re very young; their CTO didn’t even attend college and has only a high school diploma, but his technical skills are outstanding. Their youth and technical ability allowed them to approach things differently and develop a strong instinct for product.

Colin:

Indeed, many hacker-type talents don’t have a traditional higher-education background.

Qiao:

Right. At this stage, background isn’t the primary criterion. Instead, we gauge their thinking style and product understanding through conversations.

Colin:

What was PUMPFUN’s valuation when you invested? Was it in the tens of millions?

Qiao:

Not that high; our typical investments are around a few million dollars, and for pre-seed, our standard allocation is $500,000. We generally don’t invest in projects with valuations in the tens of millions.

Colin:

Since these are early-stage projects, wouldn’t the failure rate be high? What do you estimate it to be?

Qiao:

It depends on how you define failure. If a project goes to zero, then it’s a failure. I categorize investment outcomes into three types: the first type is projects that go to zero; the second recovers the principal or yields modest returns; and the third delivers 10x, 100x, or even 1000x returns. PUMPFUN falls in that high-return category and is an exception. So far, the rate of projects going to zero has actually been quite low, which has surprised me. My expectation was a third would go to zero, a third would recover the principal, and a third would bring tenfold or more returns. In reality, very few projects go to zero. If a team is excellent and genuinely committed, they typically find a way to survive.

Colin:

It seems you have unique insights and methods for selecting teams. Beyond youth and drive, are there other criteria?

Qiao:

Youth isn’t a criterion; we’ve invested in founders in their thirties and even older. The key is the alignment between the team’s background and the project. For a memecoin launchpad, a younger team might be a better fit, whereas infrastructure projects may need teams in their twenties with strong technical experience. The main criterion is whether the team’s background aligns with the project.

Colin:

Was your investment in PUMPFUN in equity or tokens?

Qiao:

They did an angel round, which was helpful for them. Consumer projects like PUMPFUN don’t need large amounts of funding; we invested hundreds of thousands of dollars.

Colin:

That’s quite a bit for a project valued in the millions.

Qiao:

Yes, our allocation wasn’t small, but for consumer-focused projects, hundreds of thousands are often enough. Too much funding can sometimes be an obstacle.

Colin:

What support did you provide PUMPFUN during their success journey?

Qiao:

We provided the core idea, but the execution was up to the team. Good ideas are only 1% of success; 99% lies in execution. A strong team recognizes good ideas and can effectively execute them. Many successful ideas aren’t new — the key is in executing them well.

Colin:

Did PUMPFUN face many competitors before they succeeded? How did they overcome them?

Qiao:

Yes, PUMPFUN had some competitors early on, though not many. But as they reached revenue in the tens of millions, competitors increased rapidly. Their success came from execution and deep user understanding since they themselves were users.

Colin:

How many people are on their team?

Qiao:

Now they have about a dozen people; initially, they were just three.

Colin:

Their per capita profit must be very high.

Qiao:

Yes, this is common for many successful Web2 startups. Instagram had only about a dozen people when it was acquired by Facebook.

Qiao’s Perspective on the Memecoin Sector and Market Potential Analysis

Colin:

I have a couple more questions about PUMPFUN. First, where do you see their direction going in the future? Do you think they might pivot or upgrade toward something like a more centralized exchange model?

Qiao:

I have some idea of their future direction, but I can’t share it at the moment.

Colin:

Understood, no problem. Another question: do you think they’ll issue their own token? Or is that something they might consider?

Qiao:

I can’t say anything on that either, haha.

Colin:

Alright, let’s talk about another standout project — Moonshot. When did you first connect with them? How did they find you?

Qiao:

We connected with them during our previous round, around June or July. I don’t know exactly how they found us, but they applied through our website, and after a few discussions, our team was quite impressed. They don’t have prestigious backgrounds — just two young founders.

Colin:

Which country are they from?

Qiao:

They’re a U.S.-based team. One of the founders is a student at Duke University. Normally, VCs wouldn’t invest in a team like this, but after talking to them, we found they had a great feel for the product.

Qiao:

Moonshot’s concept is straightforward, solving a direct problem. For instance, on centralized exchanges like Coinbase or Binance, you can deposit fiat to buy tokens, but those tokens are already listed. Moonshot allows users to buy memecoins directly with fiat. It’s a simple idea, but as long as there’s a problem and a good solution, it can go far.

Colin:

So is their advantage more about enabling fiat purchases of memecoins, or is it more of a curated platform for memecoins?

Qiao:

Curation is important. When we discussed this, we noticed the team’s uniqueness in their decision to only feature the most liquid version of each memecoin type. For instance, with multiple Trump memecoins, they only show the best one. This simplified user experience is highly appealing to retail investors.

Colin:

What was their valuation when you invested?

Qiao:

We don’t invest in projects valued in the tens of millions.

Colin:

Is their valuation quite high now? Have they raised a new round?

Qiao:

Their valuation is about 100x the initial investment.

Colin:

It sounds like PUMPFUN and Moonshot are your most successful projects this cycle. Are there others?

Qiao:

We previously invested in Glow, a decentralized energy (DePIN) project focused on carbon credits. Their recent round valued them at $160 million, with investment from USV, a leading global clean energy VC.

Colin:

You also invest in memecoins. What’s your view on the sustainability of this sector? PUMPFUN and Moonshot are both focused on it — if it’s unsustainable, they’d be affected.

Qiao:

Even if we hadn’t invested in PUMPFUN and Moonshot, I’d still believe the memecoin sector is highly sustainable. What’s the core reason people buy memecoins? Many do it hoping for a big return. In contrast, VC-backed coins rarely yield similar gains and often drop post-listing. While some VC-backed tokens do well in specific market cycles, like DeFi, most retail investors don’t understand those sectors. They gravitate toward assets they can relate to. Taken together, this gives memecoins a degree of sustainability.

Colin:

True. In this cycle, VC-backed tokens are indeed challenged by memecoins, partly due to regulatory pressures. With ICOs and even some launchpads restricted, memecoins have filled the gap in allowing retail investors early participation.

Qiao:

Even if VC-backed tokens could do ICOs, what would the outcome be? First, retail investors might not understand the projects behind those tokens; second, investments often have long lock-up periods. Memecoins, on the other hand, are immediately liquid. So ICOs wouldn’t impact memecoins much but would affect VCs, as many projects would find it harder to raise funds through them and might instead go directly to ICO.

Expectations for U.S. Regulatory Changes and Their Impact on the Crypto Industry

Colin:

But expecting a swift loosening of policies with Trump in office may not be realistic. There can be a big gap between pre-election promises and post-election actions. But since you’re in the U.S., I’d love to hear your thoughts on what specific changes Trump’s election might bring to the crypto industry.

Qiao:

The clearest change would likely be that Trump wouldn’t appoint someone like Gary Gensler to lead the SEC. That’s crucial, not just for the SEC but also for the Treasury, both of which are essential.

Colin:

Yes, the Treasury handles stablecoins and other related areas.

Qiao:

Exactly. The Treasury oversees not only stablecoins but also privacy matters, even self-custody. Its powers are far greater than the SEC’s, though they haven’t focused specifically on crypto in the past four years. If the next Treasury Secretary has a hostile stance, it could be very negative for the industry.

Colin:

I remember a pro-crypto figure from the Treasury’s currency division during Trump’s term.

Qiao:

Yes, exactly. The most immediate effect of change would be that if the SEC and Treasury stop clamping down on crypto, entrepreneurs in the U.S. and globally would feel encouraged to launch crypto projects. In the past four years, the SEC targeted legitimate projects, rather than cracking down on clear violators like FTX.

Qiao:

So the immediate impact would be a boost in entrepreneurial spirit, which is very beneficial for crypto. This change would be almost instant without needing new laws or regulatory changes; simply shifting the attitude could lift morale. Beyond sentiment, the new laws you mentioned, such as those for stablecoins or ICOs, would require time to implement. But with both houses of Congress led by Republicans now, there’s a higher chance for these laws to pass, though it’ll still take time.

Colin:

After your success with PUMPFUN and Moonshot, has the number of projects reaching out to you increased?

Qiao:

Yes, there’s been an increase. Even before PUMPFUN and Moonshot, most entrepreneurs in the U.S. and Europe knew of us. As you mentioned, the Chinese community may only now be catching up. In fact, in our recent round, around 30–40% of projects were from Chinese teams. Chinese teams have a harder time raising funds from Western VCs due to cultural and language barriers, but that isn’t an issue for me.

Future Investment Directions and Advice for Chinese Startup Teams

Colin:

You’ve had four years of experience in early-stage incubation and investment, and you mentioned that about 30–40% of your investments involve Chinese teams. Do you see any differences between Chinese and U.S./European entrepreneurs?

Qiao:

At their core, there isn’t much difference. The main distinctions are language and culture, which can create barriers when communicating with Western communities or VCs. I’ve noticed that many Chinese projects place a lot of emphasis on gaining Western VC support and validation. I always tell them that this isn’t very important; the key is to make a great product. That naturally attracts good VCs. Of course, the community does have some influence, which is a cultural difference.

Colin:

True, creating a product with real users and revenue isn’t easy. Successful projects like PUMPFUN are rare, perhaps only one in several thousand or tens of thousands. Do you think this type of product can be anticipated, or does it mostly depend on luck and market competition?

Qiao:

Luck is a huge factor. PUMPFUN is a perfect example. Even when they first started, we provided the initial idea, but we never expected it to grow this big. The role of chance is very high, probably over 90%.

Views on the Current Cycle’s Memecoin Hype

Colin:

How do you think the hot topics in this cycle compare to the previous one? Around 2019, fields like DeFi, NFTs, and gaming were all booming, but it seems like this cycle is primarily about memecoins.

Qiao:

This cycle is indeed different. The main trending areas are memecoins and stablecoins. However, stablecoin projects generally don’t issue tokens.

Colin:

Yes, projects backed by Circle or Tether tend to be more stable. Would you consider investing in new stablecoin projects?

Qiao:

We wouldn’t invest in stablecoins that compete with Circle or Tether. Instead, we’d focus on application-level or infrastructure-related projects, such as cross-border payments. On the infrastructure side, we invested in a bridge project that provides APIs for developers, which can be considered stablecoin infrastructure.

Colin:

What do you think of the trend of memecoins being concentrated on Solana? And how does Solana’s competition with Ethereum play into this?

Qiao:

I’m not entirely sure why memecoins are so focused on Solana, but it might be related to early influencers like Ansem. He brought a large user base to Solana, which may have contributed to the growth of memecoins.

Colin:

True, influencers play a big role in memecoins. For instance, Murad’s recent endorsements have added momentum to memecoins. His thinking is very clear. I did a podcast with him recently, and he’s definitely a unique presence.

Qiao:

Yes, Murad is quite impressive. Many traditional VCs may not think highly of him, but when you listen to him, his thoughts are extremely clear.

Colin:

Indeed, his logic is simple and direct. Similar to Ansem, there are those who don’t recognize his impact, yet he has strong insights and a solid technical background.

Criteria, Selection Process, and Support for Teams

Colin:

Back to an earlier question — considering the volume of project applications you receive, what criteria and processes do you use for selection? How do you initially filter out the projects you’re interested in?

Qiao:

I handle the selection myself. I review four to five thousand projects a year, about a dozen each day. I don’t have strict criteria; it’s largely intuition. Through the application materials, I get a feel for the clarity of thought, background, and the project’s appeal.

Colin:

Once a project passes the initial screen, how do you further engage with the teams?

Qiao:

If a project passes the initial screen, I arrange for our partners to speak with them. Many excellent projects can be evaluated in a five-minute conversation. Although we usually talk for 20 minutes, a few minutes is often enough to make a judgment.

Colin:

What kind of support do you provide post-investment?

Qiao:

We mainly offer support in three areas: first, helping them enter the market, find users, and analyze feedback; second, if the initial idea needs refinement, we’ll explore new concepts with them; third, we assist them in fundraising.

Views on Recent VC Token Performance, TON, and the Impact of Trump’s Election

Colin:

How do you view the recent poor performance of VC-backed tokens, like Scroll, which dropped significantly on Binance?

Qiao:

It’s a simple issue of too many project tokens and not enough liquidity. The FDV (fully diluted valuation) of VC coins is often too high, leaving no buyers and causing prices to drop. By contrast, memecoins usually have lower initial FDVs, allowing more natural growth. Centralized exchanges also share some responsibility, as they list projects lacking a user base, ultimately hurting retail investors.

Colin:

What are your thoughts on the recent TON blockchain gaming craze? Have you considered investing in similar projects?

Qiao:

We’ve been looking for opportunities to invest in TON blockchain projects but haven’t found the right team yet. TON is unique as the only Web3 project backed by a major social media platform, though it faces challenges with user quality and token performance.

Colin:

How long do you think the crypto bull market will last under Trump’s influence?

Qiao:

I’m unsure about the duration, but the outlook for the next three to six months is very positive. However, it will mainly depend on macroeconomic policies. Trump’s crypto stance is one factor, but broader economic trends are even more important.

Colin:

Alright, we’ve covered a lot today. Thank you very much for your time. Let’s dive deeper next time.

Qiao:

Thank you!

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