Our Thesis

The internet is undergoing a profound transformation. Web3, characterized by decentralization, trustlessness, and permissionlessness, is reshaping how we interact, transact, and create value online. At the heart of this evolution lies a new paradigm: the attention economy. As venture capitalists navigate this dynamic landscape, one fund stands out for its strategic focus on attention and category building within the Web3 ecosystem.

Capturing Attention in the Digital Age

In today's digital world, attention is a scarce and valuable resource. From social media platforms to gaming experiences, capturing and retaining user attention is the key to success. Web3 startups are pioneering innovative approaches to attention capture, leveraging decentralized platforms, immersive experiences, and novel incentive mechanisms to engage users in new ways.

Hercules recognizes the importance of attention in driving value within the Web3 ecosystem. By investing in startups that excel in capturing and monetizing attention, the fund aims to unlock new opportunities for growth and innovation. From decentralized social media platforms to virtual reality experiences, the fund seeks out projects that are at the forefront of attention-driven innovation.

Fostering Category Building

Building sustainable categories within the Web3 ecosystem is essential for long-term growth and adoption. Hercules VC is committed to identifying and supporting startups that are not only disrupting existing industries but also creating entirely new categories within the Web3 space. By investing in category leaders and early movers, the fund aims to facilitate the emergence of robust ecosystems around key verticals in DeFI, NFTs, Gaming, and core Infrastructure.

Bullish Verticals

The venture fund has identified several key verticals where it sees significant potential for growth and value creation:

Identity Solutions: Identity management is a foundational pillar of the Web3 infrastructure. The fund is bullish on startups that are innovating in areas such as self-sovereign identity, decentralized authentication, and privacy-preserving identity solutions.

Gaming Intellectual Property (IP): The intersection of gaming and Web3 presents exciting opportunities for the creation and monetization of digital assets and intellectual property. The fund seeks to invest in startups that are leveraging blockchain technology to tokenize in-game assets, create player-owned economies, and enable new forms of gaming IP ownership and trading.

Core Infrastructure: A strong foundation of core infrastructure is essential for the scalability and reliability of the Web3 ecosystem. The fund is interested in startups that are building fundamental infrastructure layers such as blockchain protocols, decentralized storage solutions, and interoperability protocols.

Capital Efficiency in DeFi: Decentralized finance (DeFi) represents a paradigm shift in the way financial services are accessed and delivered. The fund is particularly interested in startups that are driving innovation in DeFi protocols and applications while prioritizing capital efficiency, security, and user experience.

New Ecosystem Building on BTC: Bitcoin (BTC) remains the cornerstone of the cryptocurrency ecosystem. The fund sees opportunities for startups to build new ecosystem layers on top of Bitcoin, including layer 2 scaling solutions, decentralized exchanges, and Bitcoin-native applications.