Q&A with Bradley Tusk (Tusk Ventures) on Crypto Regulation
Bradley Tusk is the CEO and co-founder of Tusk Ventures, the world’s first venture capital fund that invests solely in early stage startups in highly regulated industries. Tusk Venture Partners specifically invests in early-stage consumer technology startups operating in heavily regulated markets across North America, which makes perfect sense as to why they invested in Dibbs. Despite not owning a single NFT, Tusk answers questions about how we got him onboard and what regulation ideally looks like for him in Web3.
Q: Bradley, do you own any NFTs?
Bradley: No. I don’t own NFTs and I don’t own crypto. By the way, I don't even pick stocks, you know, I don't have the ability to do that. And it seems to me that I don't have the ability to know whether any particular NFT will be more valuable or less valuable. But you know what? I was an investor in Coinbase, I was an investor in Circle, because we focused on the founder and the infrastructure they were building and guess what? Those are really good investments.
Q: How do you choose which startups to invest in?
Bradley: I have to believe in the founder, and in this case, Evan was an easy sell to us very quickly, so that there really wasn't a debate around that. That was settled almost immediately. So then it comes to, “Okay, do I believe this will be a thing? If this will be a thing over the long haul, if you believe in the founder and you think that they have an approach to the infrastructure, which is what Dibbs does, that is truly unique, then we should invest.
Q: What was it that convinced you to invest in Dibbs?
Bradley: I listen to founders pitch me all day long. Well, everyone who pitches me, they know I'm the regulatory guy, so there is at least some nod towards regulation, because it would be sort of bad pitching if you didn't.
But there's a big distinction between people telling me what I hear: “Regulation is very important and that's why we want your help.” Fine. And then with Evan, it was just very clear: “We understand that what we're doing is novel. We understand that it's gonna fall into a gray area. And rather than the traditional tech strategy of putting our head in the sand and hoping nobody notices, we wanna be proactive about that.” And I almost never hear that. And if I'm the regulatory guy and I never hear that, it means it's never being said. So, I was so impressed by that and it just also made me excited for us to work with Dibbs.
Part of what our fund does is we invest, but then we actually take on the regulatory communications challenges of our portfolio companies and we work on them. And that's all my background in politics is and my team’s is how we do that. So like the idea of, “Hey, here's a company that is proactively interested in new forms of regulation.” That's the kind of really nerdy stuff that like me and my team geek out on. But it was so cool to have a founder be into it, too.
Q: Where do you see Dibbs now?
Bradley: There is the physical card, which I think maybe just because I'm old–– adds some more legitimacy and intrinsic value to it because there's something real behind it. And like Evan, when I was a kid, I collected baseball cards too. So it had some significance to me. So you've got that and clearly once there's a physical object, there is an element of consumer protection that starts to come in. You're selling something, whether it's fractionalized or whole, from a business to an individual. That is typically, if you look at what defines consumer protection, that's when it comes out.
Right? And so you have Dibbs saying, "We recognize this. We are doing something that even if the regulators have no clue that we're doing this, no clue what this is, and we could probably go five years without anyone actually ever noticing what we're doing? Let's approach this totally differently. Let's say that we know this is gonna be regulated and try to build a moat for our company and, and really build trust with our customers to proactively say, we get it. So please regulate us. Let's establish rules for this sector." And quite frankly, I believe that Dibbs is gonna be the only one compliant with new regulations, and that's why we've got a huge advantage.
Q: Does the idea of the metaverse scare you?
Bradley: We know the metaverse is coming. It might be good, it might be bad. I've spent some time trying to influence regulators as to how to think about it so that it is good or not bad. But if it's coming, then fundamentally what Evan's building is the tip of the spear – and NFTs may do really well. They may not. But it doesn't really matter because once the metaverse is here, and more and more applications are being built on the blockchain, there's gonna be so many more use cases. These are numbers you would believe because everything they're doing can be applied to so many different items across Web three.
Who's driving it right now? Meta. They've literally changed their name. Apple, Microsoft, and other companies are spending tens of billions of dollars, which is why you know it's going to happen.
My concern is not that the metaverse won't exist, it's that the interoperability that I think would make it useful for consumers is never going to happen unless the government forces it to happen. The beauty and the potential of the metaverse is to experience the world in ways for other people, and everything that it has to offer, right? That's what's cool about it. Not that I could buy something even faster on Amazon right now. The potential of the metaverse gets limited if we're leaving it in the hands of a couple of companies, who, by the way, fail us already over and over.
Q: From a metaverse regulation standpoint, what kind of world do you not want to live in?
Bradley: We live in a world where Section 230 still exists, which protects the platforms from any liability from content posted by the users in the first place. We live in a world where there's no privacy framework for this country, right? So Europe has the GDPR, California has a CCPA, the United States, nothing.
We live in a world where our antitrust laws are so weak that as Facebook acquires Instagram, WhatsApp, Oculus, and everything else. There's nothing the FTC can do about it, right? So we live in a world where the regulations we needed a decade ago are still not in place, and that we're gonna enter a virtual world that is 10 times faster and more complicated, in like the next five years - that is what concerns me about the metaverse from a regulatory standpoint.
Nila Lê is the Senior Content Manager at Dibbs. Nila's PC is comprised of Pokémon TCG, NBA and WNBA cards, as well as pop culture NFTs.