What happened internally at Paradigm with the upheaval among top crypto VCs?

Author: Jaleel, BlockBeats

The history of a company is essentially the history of its executive turnover. In the past three months, there have been significant personnel changes at the senior level of Paradigm that are worth noting.

According to BlockBeats, Paradigm co-founder Fred Ehrsam announced today that he is resigning but will remain with the company as a general partner. Five days ago, Frankie and Caitlin Pintavorn were promoted to research partners at Paradigm. Furthermore, according to BlockBeats, Paradigm's Chief Financial Officer Nathan Apsel and General Counsel Reena Jashnani-Slusarz left the company in mid-September.

Fred Ehrsam: From Managing Partner to General Partner

Paradigm co-founder and former managing partner Ehrsam, born in Boston, is considered a legendary figure. He specialized in video games during high school and was an avid World of Warcraft player, where he first encountered the concept of crypto. In 2010, Ehrsam graduated with honors from Duke University with a bachelor's degree in computer science and a minor in economics. After graduating from Duke, Ehrsam became a foreign exchange trader at Goldman Sachs in New York and also worked as a portfolio analyst at BlackRock in New York.

The opportunity to enter the crypto industry came when Ehrsam learned about Bitcoin from a paper and began trading in his spare time.

In 2012, cryptocurrency enthusiasts and traders often congregated on the Bitcoin subreddit, where Ehrsam met Brian Armstrong, and together they co-founded Coinbase in an apartment in San Francisco. It was reported that Ehrsam contacted his alma mater, Duke University, during fundraising for Coinbase's Series C round in 2015, resulting in an initial investment that increased a hundredfold.

Ehrsam served as CEO of Coinbase from 2012 to 2017, leading its growth into a company with 13 million users and a valuation of $1.6 billion. At the end of 2017, Ehrsam transitioned from daily operations at Coinbase to focus on building blockchain-based applications.

In January 2017, Ehrsam announced his departure from the company but would remain on the board. It was reported that as of April 2021, he still owned 8.9% of Coinbase's stock and was assigned to the company's audit committee before its public offering in April 2021. Interestingly, an analysis of regulatory filings as of May 27, 2022, showed that since Coinbase went public, four executives, including Brian Armstrong and Fred Ehrsam, had collectively made approximately $1.2 billion from selling shares.

Due to his legendary experience, Ehrsam was also portrayed as a prototype in the novel "King of Crypto: A Startup's Quest to Take Cryptocurrency Out of Silicon Valley and Into Wall Street."

After leaving Coinbase, Ehrsam's entrepreneurial journey did not stop there. In 2018, Ehrsam co-founded the cryptocurrency investment firm Paradigm with former Sequoia Capital investor Matt Huang. At Paradigm, they focus on investing in cryptocurrencies and related companies, with Ehrsam serving as managing partner.

Left: Matt Huang; Right: Ehrsam

Now, Ehrsam has chosen to resign from his position as managing partner at Paradigm and will continue as a general partner.

As for the reason behind this decision, Ehrsam stated on his social media: "This change allows me to free up some time to explore scientific fields that I am personally passionate about. From Hal Finney and cryonics to Vitalik and Brian Armstrong's recent support for longevity research, there has been a long-standing interest in the intersection of biology and crypto. For many years, I have personally invested in and supported biological research, and I am excited to ramp up these efforts."

Chief Financial Officer Nathan Apsel Leaves Paradigm

Former Chief Financial Officer Nathan Apsel is also a person with a rich and colorful background. Before joining Paradigm, Nathan was the CFO of 8VC. Previously, he was a senior manager at PwC, responsible for asset management. He holds a master's degree in accounting from the University of Oregon.

On September 2, an internal email obtained by The Block revealed that Paradigm's Chief Financial Officer Nathan Apsel and General Counsel Reena Jashnani-Slusarz would be leaving the company in mid-September. Jashnani-Slusarz joined Paradigm in 2021 as GC and previously served as managing director and deputy general counsel at Elementum Advisors, LLC.

After leaving Paradigm, Nathan took on the role of CFO at Maveron, where he provides leadership across all areas of finance, operations, and strategic projects.

According to an insider, current Chief Legal Officer Katie Biber will continue to lead the legal team, and the company will announce a new Chief Financial Officer in the coming months. Paradigm has recently hired Alex Grieve as head of the policy team and Cookie Wiese as head of human resources, so the overall employee count has not changed.

Two Newly Appointed Partners

Five days ago, according to BlockBeats, co-founder Matt Huang announced two personnel appointments on social media, promoting two new partners, Caitlin Pintavorn (@caitlinxyz) and Frankie (@FrankieIsLost).

Caitlin Pintavorn was previously an investor at Insight Partners, focusing on cryptocurrencies. Before joining Insight, Caitlin worked at PathAI and Two Sigma and holds a bachelor's degree in economics from Brown University.

Caitlin Pintavorn's entry into the crypto industry is also interesting; when the global pandemic shifted people's lives online, she began searching for a community to belong to on the internet. Ultimately, she found her place in the crypto space through Twitter and Discord servers. Here, she discussed cryptocurrencies, designed NFTs, and researched DAOs with many online sages. She believes this field is vibrant and creative. As an investor at Insight Partners, she interacted with hundreds of founders, further immersing herself in this field.

Additionally, Frankie (@FrankieIsLost) was also promoted to research partner at Paradigm. Previously, Frankie was a machine learning engineer, quantitative developer, and trader, holding degrees in computer science and econometrics.

Behind the Executive Changes, What Lies Ahead for Paradigm?

After Fred Ehrsam's departure, the entire cryptocurrency community holds differing views on Paradigm's future. Some believe this marks the company's decline, while others see it as a new beginning. Executive changes often signify strategic adjustments and shifts in direction for a company. However, for Paradigm, facing such transformations actually hides more opportunities and challenges. So, what else has happened behind the executive changes at Paradigm?

Internal and External Impacts on Paradigm

Last month, a significant event for Paradigm was its investment project Reflexer openly mocking Paradigm by repurchasing the FLX tokens held by Paradigm and permanently destroying 50% of the repurchased portion, choosing to part ways.

Sarah: What did Paradigm do? Ameen: It will be disclosed, but not now. Source: Discord

In Reflexer’s "declaration of war," they mentioned that Paradigm's investment in FTX led to a setback in the crypto industry, and after the update to Paradigm's official website, many descriptions related to crypto and web3 were removed, shifting towards "cutting-edge" technologies, including AI.

Although Paradigm did not respond to Reflexer or apologize, they chose to return to crypto in July by reinstating crypto on their official website. Paradigm partner Matt Huang even stated that the previous website update was a mistake and that they had never left crypto.

Whenever Paradigm's current situation is mentioned, the "website update" incident cannot be overlooked; this "website update" has left a deep mark on Paradigm's history. However, the underlying facts reflected may be similar to the reasons for the personnel changes, indicating that there are disagreements among team members at Paradigm, and internal management does not seem perfect.

Securities lawyer brain genius (@LogicalBTC) also expressed a similar view on social media: "The CFO has left, the legal director has also gone, and the managing partner is about to step down. Paradigm actually promoted a seemingly 24-year-old young person to partner, who has not worked at any fund (including Paradigm) for more than a year. They even appointed their policy lawyer as the head of the legal team, which is clearly unrealistic."

"Paradigm has not truly 'redefined the possibilities of venture capital'; in fact, they seem to lack understanding of how to run this business. Fred Ehrsam is undoubtedly a legendary figure in this industry. But no matter how thoughtful the words are, they cannot cover up the current poor state of Paradigm; all signs indicate that it is now a mess," brain genius added.

Layout of Crypto Policy Research

Against this backdrop, Paradigm's business layout and development will be under great scrutiny. BlockBeats has discovered that amidst frequent personnel changes, Paradigm seems to be laying the groundwork for policy research.

According to BlockBeats, on September 26, the cryptocurrency venture capital firm Paradigm announced the launch of what they call a "first-of-its-kind" policy lab, which will serve as a "hub" for academics, policy experts, lawyers, and technologists. The team will produce "cutting-edge research, commentary, and advocacy" on the most important policy issues facing crypto and other frontier technologies.

As part of the launch plan, the Paradigm policy lab announced two inaugural academic researchers, Primavera De Filippi from Harvard's Berkman Klein Center and Agostino Capponi from Columbia University, who will study "regulatory equivalence"—a term used to describe "the comparability of legal and technical constraint systems and how to achieve the same policy outcomes through regulation or technical architecture."

Rodrigo Seira, co-head of the policy lab, stated in interviews and blog posts: "Over the past year, Paradigm has established itself as a policy leader, from fighting for cryptocurrencies in court to convening thought leaders to publishing policy-centered research, covering all aspects."

Clearly, Paradigm's exploration of legal regulation has become more frequent. Looking back to earlier this year in July, Paradigm appointed a new head of government relations, Alexander Grieve. It was reported that Grieve has over a decade of experience in Washington's political and financial policy and has lobbying experience in cryptocurrency during his time at Tiger Hill Partners. Paradigm stated that Grieve's addition will drive clearer regulation from the government.

Paradigm's history and current situation are filled with stories worth exploring, with passion, controversy, and twists at every turn. The recent departure of Fred Ehrsam, the promotion of new partners, and disputes with investment projects all reflect the challenges Paradigm faces in pursuing innovation and leading the industry, with every step accompanied by risks and uncertainties.