Lex chats with Matthew Le Merle - CEO of Blockchain Coinvestors, a leading blockchain and AI fund-of-funds. He reflects on the limitations of large institutions in adopting disruptive technologies and why he chose to back innovators over incumbents, using stablecoins as an example of asymmetric value creation. Le Merle explains his evolution from angel investor to institutional LP, highlighting the benefits of leveraging top-tier venture capitalists’ expertise in inefficient early-stage markets. He outlines the psychological challenges of venture investing, where failures appear early and outsized wins often take a decade, contrasting this with the faster liquidity but higher existential risk in token markets. Finally, he critiques institutional allocators for over-relying on efficient markets, under-allocating to venture despite its role in driving future value, and positions his strategy as fully committed to early-stage blockchain and AI as the highest-returning segments. NOTABLE DISCUSSION POINTS: 1. Innovation Threatens Incumbents, Benefits Disruptors: Major technological shifts, from the internet to blockchain and AI, create winners and losers. Incumbents often resist disruptive change because it threatens existing revenue models, while nimble startups and tech-first companies can rapidly capture new market opportunities. 2. Venture Success Requires Navigating High Failure Rates: In early-stage investing, most portfolio companies will fail, often within the first 3–4 years. Returns are driven by a small number of outsized successes, usually via acquisitions rather than IPOs, requiring patience, resilience, and a disciplined investment strategy. 3. Inefficient Markets Offer the Greatest Asymmetric Upside: Early-stage venture and emerging technologies like blockchain and AI are inefficient markets where superior access, insight, and execution can generate returns far above those available in traditional, efficient markets like public equities or bonds.