Fred Wilson of Union Square Ventures takes corporate investors to task as "dumb money" for a blind rush into blockchain startups.
Blockchain is one of the buzziest terms in startups and fintech today, but just because an idea is generating a lot of ink doesn’t mean that it’s right for every investor.
“Literally all the money that went into this sector from 2010 to 2014 went in from angels and [others],” Wilson said on stage at the CB Insights Future of Fintech Conference. “And now all of a sudden all these financial services companies have shown up…the dumb money’s shown up.”
When that happens, he said, “It’s time to get out of this space for a while.”
He painted it as a case of FOMO (fear of missing out): big, slow-moving financial services companies in a rush to get their hands on the new shiny thing for fear of being left behind, even as its specific applications in finance are still being determined.
“They’re jonesing for it,” added moderator Nathaniel Popper.
Wilson agreed: “They’re just like ‘we gotta get some of this blockchain’…”