Our Thesis
At Early Riders, we fundamentally believe that Bitcoin is better money. Our investment strategy integrates Bitcoin into every aspect of our operations to yield superior returns. We raise capital, maintain our treasury, and return capital to our limited partners exclusively in Bitcoin. Additionally, all of our portfolio companies maintain Bitcoin reserves.
This comprehensive Bitcoin integration creates a high opportunity cost for capital deployment, given Bitcoin's historical price appreciation. Every investment decision is weighed against the compelling alternative of holding Bitcoin long-term.
We see significant potential in early-stage companies with large total addressable markets, particularly those aligning with our Bitcoin-centric philosophy. These companies understand that every capital expenditure and expense should be evaluated against the prospect of acquiring and holding Bitcoin for the long term.
Early Riders is dedicated to differentiated market analysis, prudent capital allocation, and providing exceptional operational guidance in our mission to deliver exceptional Bitcoin-adjusted returns.
Investment Themes
Bitcoin is the Hurdle Rate
Bitcoin's historical price appreciation and resistance to debasement establishes it as a robust benchmark for success and wealth preservation. We anticipate that companies will increasingly recognize its utility, accept revenue directly in Bitcoin, and maintain it on their balance sheets to preserve purchasing power. This shift redefines the traditional hurdle rate concept: instead of using short-term interest rates plus an equity risk premium, businesses will measure their opportunity costs against the potential value of holding Bitcoin.
Do More With Less
The convergence of deflationary technologies — Bitcoin, AI, and advanced software — creates unprecedented opportunities for early-stage companies. These innovations provide access to better information, products, and services at reduced costs, enabling startups to achieve profitability more rapidly and with lower initial investments. We believe that smaller, agile companies are better positioned to swiftly adapt to market demands, while larger, more established entities may face challenges in quickly adjusting their strategies and operations.
Bitcoin Will Change Capital Stacks
By adopting Bitcoin as a balance sheet asset, businesses can mitigate counterparty and debasement risks while potentially growing their purchasing power. Early-stage companies, which often require significant capital expenditures and upfront costs, can benefit from Bitcoin's price appreciation potential. This approach may offer a longer operational runway compared to traditional venture investments, providing more time and resources for product development and market entry.
Every Company is a Bitcoin Miner
Businesses outside the Bitcoin mining industry are in many ways better suited to develop sustainable competitive advantages, moats, and defensible streams of free cash flow to accumulate Bitcoin. Broadly speaking, there are many companies with lower theoretical costs for producing a Bitcoin that have the flexibility to retain a larger portion of their mined Bitcoin. Therefore, all companies can be Bitcoin miners.
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At Early Riders we raise our fund in Bitcoin, maintain our capital in Bitcoin, require our portfolio companies to maintain Bitcoin reserves, and return capital to our limited partners in Bitcoin. Our goal is to return more Bitcoin to our limited partners than they invested in the fund.
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By investing in early stage companies with strong focus on maintaining low fixed costs and high gross-margin businesses, we can allocate capital to the best ventures in Bitcoin. We aim to obtain a double digit equity percentage in every company we invest in. Additionally, our portfolio companies are aligned to invest as much of their positive cash flows into maintaining a strong Bitcoin treasury.
We anticipate that the exit opportunities will mostly be selling to large legacy financial institutions that have a desire to get into Bitcoin quickly, similar to the exit strategy during the growth of the internet. -
Early Riders invests in companies across the Bitcoin universe, and companies across legacy industries that have the chance to displace incumbents by incorporating bitcoin into their technology stack. We have invested in multi-institution custody solutions, Bitcoin treasury solutions, and plan to invest in a number of companies across payments, lending, financial services, exchanges, and related consumer services.
Bitcoin’s Total Addressable Market
We believe that Bitcoin is a $200T asset class and there is a large asymmetrical opportunity for entrepreneurs that embed bitcoin into their businesses.
Source: Jesse Myers