Tangent 2024 Letter to Team
Excerpt from our annual internal letter
Tangent is a principal investment firm specializing in cryptoassets.
We helped build some of the largest investment institutions in the industry, and now invest in founders building industry-defining protocols and applications across both private and liquid markets.
Below is an abridged excerpt from our annual internal letter to our team, where we share principles crystallized from our learnings as investors, and broad outlook for the industry. In this first entry, we also shared our values as a prop fund and what defines us as a team.
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Our Roots
Three years ago, Darryl and I started an angel collective with a few founder friends in crypto. We gave away all our deal flow for free, and delivered 30x+ MOIC to everyone involved.
Before we shed our angel collective cocoon and blossomed into a full-fledged prop fund, we almost named this collective WAGMI DAO (mostly Jason’s idea). Fortunately for our sakes, Darryl’s sanity prevailed and we called it Tangent.
The name ended up perfectly encapsulating how we do things differently than most. From our prop-only model, to our portfolio construction, to a hiring process focused on finding people who are radically different from each other, everything we did was done from first-principles and not from blindly following convention simply because “that’s how it’s always been done”.
While we are no longer just an angel collective, the spirit of why and how we started remained:
TO BUILD SOMETHING GREAT WITH PEOPLE WHO SHARE OUR VALUES AND RELENTLESS DRIVE FOR EXCELLENCE.
We are grateful that each of you have taken a chance on Tangent during our early days and we are excited to continue building the world’s #1 crypto investment fund with all of you.
Our Industry
Remember cynics sound smart, optimists get rich.
The “smart” thing this year has been to look at the success of Pump.fun and declare “crypto is only good for speculation”. In a long enough timeline, this view likely has as much foresight as “AI is only good for chatbots because the breakout consumer-facing app today is ChatGPT”.
As investors who navigate the 24/7 crypto markets on a daily basis, it’s easy to lose sight of the forest for the trees. In fact, if you approached me and told me the following in 2019, a year into my career in crypto, even as an ardent bull yet to be marred by Luna and FTX, I would not have believed you!
Total value locked in crypto to be 25,000x more today than in January 2019
A single DeFi exchange (Hyperliquid) trades 20,000x more volume a day today than the market leader (IDEX) of January 2019
A DeFi stablecoin (Ethena) becomes >2x as big today as USDT was in January 2019 within a year, and 16x the size of Maker, the DeFi market leader at the time
A crypto-native application (Polymarket) has 8000x the open interest in the 2024 elections vs. the 2020 elections
This is not to mention the quantum leap in performance and reliability for infrastructure, opening up the canvas for new sorts of ingenuity (and mischief) on-chain. Corporations and sovereign nations are now also beginning to hold bitcoin, and institutions that used to eschew crypto are now actively trading it for clients.
Even in our more cynical moments it is hard for us to deny that crypto has come far, and has proven itself to be the most effective global platform for coordinating capital. That simple concept alone has given rise to every meta we know of: DeFi, DePin, DeSci, NFTs, memecoins, and likely countless more.
We are now on the verge of not just monetary, but regulatory easing around the entire industry. While prices will continue their random walk, we must not forget to zoom out.
Useful things take time to scale.
Remain skeptical, but never be cynical.
Performance Recap
In our 2023 retreat, we outlined our 10-year objective as being #1 in risk-adjusted percentage returns. [redacted] In 2024, we continued the streak with the fund up [redacted] against a performance of 128.66% in BTC, 62.75% in ETH, and 78.83% in CCI30.
[redacted]
On venture investments, we caught the largest venture outcome this cycle Ethena with the largest size we have deployed, which should put us at top 1% of unrealized returns (MOIC) for all venture funds in crypto.
Why We Are Here & What it Takes
Being #1 in returns is our 10-year objective, but the North Star for Tangent has always been more than returns. From day 1 we wanted to set the standard for what it means to be the best team at navigating the most nascent asset class to have developed in our lifetimes. This comes down to relentless evolution to keep up with an ever-changing market.
We derive a deep sense of meaning from pursuing this as the journey challenges us daily, forces us to be at our best selves, and allows us to discover what level of excellence we are capable of achieving as investors and as people.
We hope each of you also think of your work not just as a vocation, but as a means to refine your chosen craft. When you do this, you will see Tangent as more than a fund, but as vessels for your personal evolution to be the best in the world at what you do. To be effective in our pursuit of being the best, there are three main values we want to instill and live by as a team.
Will to Excellence: Becoming the best is a process of learning from mistakes and not repeating them. As much as we try to study market history, no lesson will be as ingrained as those learned with pain. Just as the fund evolves to not repeat mistakes via rigorous post mortems, your path to personal evolution is also rooted in having tough conversations with yourself whenever you face losses or miss wins. More importantly, we must never demonize mistakes, and build a habit of writing down our processes so others can evolve together.
Intellectual Curiosity: Generations of successful investors have been culled by complacency. The antidote to obsolescence is relentless curiosity. If you settle for surface level understanding and hearsay like the rest of the crowd, your returns will emulate the rest of the crowd. If something piques your interest, never stop pulling on the thread to unravel the full story, and never let expediency be the excuse for lack of rigor.
Camaraderie: Finally, our success depends on each other. It is our shared commitment to rigor, intellectual honesty, and trust that makes us the #1 fund. This means giving and receiving tough feedback, holding everyone around you accountable to a standard of rigor regardless of rank, setting egos aside, and being there for one another—not just as teammates but as people. Nurture your relationships with each other, for without a deep sense of trust and mutual respect, bluntness will become demoralizing rather than a critical weapon. Celebrate wins, but also support each other in hard times.
Parting Thoughts
This was the second year of Tangent’s official inception, and the third year since we first conceived of the idea. But in many ways it was also Tangent’s first year - the first year in which we had all of you to build this into something that stands the test of time. As we enter this new beginning we leave you with some principles that served us well:
Process over outcomes. Making one good call is luck. Focus on building a repeatable process that lets you keep getting lucky. This is what separates one-cycle wonders from winners. That means regular self-assessments, meticulous note-taking, and documenting processes so that others can learn or refine.
Maintain your confidence. People in authority don’t always know the answer. This is especially true for your “seniors” or anyone you deem as competent. Assert your views, take mistakes as part of the process and don’t let them discourage you.
Disagreement between smart people is alpha, embrace it. Value being proven wrong, and always bang the table if you feel strongly about something that others do not yet see. Independent thought drives investment outcomes, and disagreement is the basis of independent thought. Whenever there is a vehement disagreement, one side is usually right in a big way.
Pain + Reflection = Progress. When you make a mistake, do not attempt to hide it or explain it away. Mistakes are expected in a game where losing 49% of the time is still considered winning. When you make a mistake, make a habit of writing them down in Post Mortem logs so your team can learn as well.
Know your spikes, hone your edge. A strength in one context is almost always a weakness in another. Learn your spikes - personality traits, temperament, instincts, modes of reasoning - that are more useful in some situations than others.
I leave you with a quote from one of my favorite books: “Be bold, but wary! Keep up your merry hearts, and ride to meet your fortune!”
Here’s to a great 2025!
Jason & Darryl