The origins of Unbounded Capital as explained by Zach Resnick on Joshua Henslee show

Getting your Trinity Audio player ready...

Joshua Henslee recently interviewed Zach Resnick from Unbounded Capital to discuss the origins of the venture capital firm, its micropayments thesis, and much more. 

Introducing Zach Resnick and Unbounded Capital

Resnick began by introducing himself. He’s the founder of Unbounded Capital, a firm that invests in micropayment infrastructure companies, particularly at the seed stage. The firm’s thesis is that micropayments are the ‘killer app,’ and it is focused entirely on blockchain now.

Resnick used to play poker professionally, and it’s through this that he discovered Bitcoin. Around 2011-2012, most poker sites allowed deposits and withdrawals via Bitcoin. However, it didn’t fully captivate him until 2016, when he discovered a company called Bits of Gold on a trip to Israel. Resnick was drawn in by the potential of what Bitcoin can do, as explained to him by the founder of this company.

It wasn’t long before Resnick started to see the potential of how Bitcoin could change the world. He kept educating himself on Bitcoin and other blockchains while making money on arbitrage. Eventually, he realized he could become a professional investor. 

Eventually, Unbounded Capital was formed, slowly developing its thesis and where it would find long-term value. By luck, they discovered Bitcoin Cash, mostly because they were convinced by arguments made by Roger Ver. This led to the BSV rabbit hole and eventually a focus on the BSV ecosystem.

Resnick revealed that they initially wrestled with the question of whether to focus exclusively on BSV, as it was condemned by the rest of the industry, before deciding to do so when the risk-reward looked attractive enough and the arguments in favor of unbounded Bitcoin made sense. They also started investing in startups in the ecosystem and took a large position in the BSV token at around $50.

“Some of the most successful startups in the next few years will be leveraging Bitcoin in a way that very few others know how to do,” Resnick said.

Investing, risk, and poker

When asked if his previous life as a poker player helped him in the world of investing, Resnick answered in the affirmative, saying poker is the single best thing he has ever encountered that helped him understand risk.

Drawing parallels between the two, he explained how at times, you have to make decisions quickly with an incomplete amount of information. Speaking about investing more generally, he said your decisions should never come down to more than a few big things, and as long as you evaluate and appraise those, you’ll do a great job compared to your peers. He pointed to Carl Icahn, a Wall Street tycoon renowned for his poker skills.

Aside from the skills that poker teaches, such as math skills and assessing probabilities, Resnick said he had made great connections through it. He had hosted some games and said countless big deals had been done while playing.

Unbounded Capitals’ criteria for investing

Henslee then asked Resnick what the firms’ criteria are for investing. What does it consider before deploying capital?

Resnick noted that focusing on micropayment companies is already one of the narrowest venture thesis’ anyone could have. He said that one of the questions they ask the founders of potential firms is, “why are you the best person to be working on this for at least a decade?” There has to be a personal connection or drive there, he stated, calling this a “founder-market fit.”

Resnick said they are very clear on their website about what they are interested in. Thus, the people who reach out tend to know what they’re looking for. Most companies they invest in today are building on BSV, but they have another fund where that’s not the case. He said they want to stay open and flexible.

“Building on BSV today shows you’re willing to make hard and tough decisions in the spirit of building something great,” Resnick said, noting that this is a quality he admires.

What sort of company would Resnick love to see so that Unbounded Capital can invest in? Resnick replied that many opportunities for loyalty points and rewards programs aren’t being taken advantage of.

Speaking about the industry more generally, Resnick said that anyone who paid attention to Sam Bankman-Fried’s tweets and statements could have seen that a blowup was inevitable. He added that a person’s character is one of the things they look into before investing. He also said that some of the more established exchanges that depend on token trading have some of the worst risk-reward equations imaginable.

Unbounded Capital’s second fund

Henslee wraps up by asking Resnick to explain Unbounded Capital’s second fund. He said that the first fund fully deployed all of its capital to long-term venture bets. 

This new fund has a traditional VC fund structure investing checks of $250k to $1 million, with a $50 million fund target to invest in the most ambitious entrepreneurs that leverage Bitcoin or other technology to facilitate micropayments. He noted that anyone interested in learning more can visit UnboundedCapital.com.

Watch: The BSV Global Blockchain Convention panel, Blockchain Venture Investments: Driving Utility for a Better World