cointracker – Product Management Confabulation

August 24, 2022

Serena Williams will discuss her expanding focus on VC at TC Disrupt

Yes, you read that right. Serena Williams, widely recognized as the greatest of all time (GOAT) to ever step onto a tennis court — or any other playing field — will join us onstage at TC Disrupt on October 18–20.

In her first interview since announcing her retirement, Williams joins us in her role as founding and managing partner of Serena Ventures (SV), the VC firm she founded in 2014. We’re also thrilled that Alison Rapaport Stillman, the firm’s founding general partner, will also take part in this fireside chat.

This year, following nine years of angel investing (including 13 unicorns and six exits), SV announced it raised a $111 million inaugural fund focused on founders with “unconventional thinking and diverse points of view.”

Williams’s firm has invested in more than 78 companies, including Billie, CoinTracker, Daily Harvest, Impossible Foods and MasterClass. Its website notes that 76% of the startups that received Fund 1 investments are helmed by underrepresented founders.

Case in point: SV recently cut a $5 million check leading an early-stage round for Wondermind, Selena Gomez’s mental health startup. That investment made Gomez one of only a few Latinas to raise more than $1 million in VC funding.

We look forward to learning what Serena Williams looks for in a founder and to gaining a better understanding of her investment thesis. We’re also curious to hear her take on what she brings to the VC table and what overarching goals she’s setting as she turns her GOAT status and champion mindset to expanding her career as a venture capitalist.

As a world-class athlete, businesswoman, philanthropist and mother, Serena Williams knows what it takes to win. She has persevered to become one of the top tennis players in history with 23 Grand Slam titles. Williams began actively investing nine years ago when she saw the impact that startups had on everyday lives; in building Serena Ventures, she has been able to multiply that effort with more than $110 million in investment capital.

Alison Rapaport Stillman is a founding general partner at Serena Ventures, overseeing portfolio management and sourcing new investments. In addition to growing the reach and impact of the SV portfolio, Stillman is the person founders turn to when they need pointed advice, detailed feedback and tough love. She holds a BS from the University of Pennsylvania’s Wharton School and an MBA from Harvard Business School. She is a CFA charter holder.

TechCrunch Disrupt takes place on October 18–20 in San Francisco. Buy your pass now and save up to $1,100. Student, government and nonprofit passes are available for just $295. Prices increase September 16.

Is your company interested in sponsoring or exhibiting at TechCrunch Disrupt 2022? Contact our sponsorship sales team by filling out this form.

May 25, 2022

The IRS’s crypto tax partner, ZenLedger, raises $15 million Series B

Government tends to struggle when it comes to keeping up with tech innovation. The past U.S. tax season that just wrapped up in April was particularly stressful for investors and the Internal Revenue Service (IRS) alike, as both struggled with the implications of 2021’s crypto investing boom.

The IRS, for its part, turned to Seattle, WA-based startup ZenLedger for help. Since its founding in 2017, ZenLedger has managed to secure four contracts with the U.S. government worth just over $500,000, none of which are expected to expire, the New York Times reported. While $500,000 seems like a paltry sum for a federal agency, the contracts are significant in the small, hypercompetitive world of crypto tax prep startups. Heading into this year’s tax filing period, ZenLedger had raised just $11.5 million in its latest funding round — significantly less than competitors such as CoinTracker and TaxBit had in their coffers at the time.

Still, ZenLedger gained the trust of the U.S. government, and it’s been doubling down on that strategy ever since, its CEO and founder Pat Larsen told TechCrunch. The company announced today that it has taken in $15 million in fresh funding from investors through a Series B fundraise.

ZenLedger founder and CEO Pat Larsen Image Credits: ZenLedger

New investor ParaFi Capital led the round alongside existing investor Bloccelerate VC, which led ZenLedger’s Series A last August. A mix of old and new investors also participated, including King River Capital, G1 Ventures, Main Street Investment, Three Point Capital, Shorooq Partners, VaynerFund, Blizzard the Avalanche Fund, and AngelList Quant Fund, the company says.

“We are moving ahead with more government contracting, which is interesting, because, basically, what we do is we build a plan for crypto. We have to ingest all the transactions from on-chain off-chain, NFTs, decentralized exchange income, sales of NFTs, and clean that up and then report it out,” Larsen said. “That turns out to be extremely useful for an individual when you do accounting and tax. It also turns out to be very useful for accounting firms.”

ZenLedger’s historical focus on individual tax filers rather than enterprise contracts differentiates it in some ways from competitors like TaxBit too, Larsen said. Still, Larsen added that ZenLedger is used by “Big Four” accounting firms, ultra-high-net-worth tax practices and CPA firms.

As for other competitors like TokenTax and Koinly, Larsen said ZenLedger aims to win by building out more, and better, integrations. The company supports over 500 exchanges, 50 blockchains, and 40 DeFi protocols including NFTs today, it says. While Larsen didn’t share details on how much ZenLedger makes in revenue, he said that its revenue has grown 5x from last year.

The company announced it had hired multiple C-suite executives in April, including a CTO and CFO.

The latest funding comes about a month after ZenLedger landed in the spotlight because its former COO, Dan Hannum, was found by the New York Times to have misrepresented his educational and work credentials to the company itself, investors, and the general public. ZenLedger found out about Hannum’s untruths well before the Times article went up and immediately fired Hannum, Larsen said.

In its April announcement, the company said it had hired Greg Adams, an army veteran with an MBA from Harvard, to serve as its new COO. Larsen said the situation with Hannum didn’t affect investors’ attitude towards the funding round, and that ZenLedger had already secured ParaFi as a lead investor before Hannum’s misdeeds were made public.

“Some investors can be pretty fickle, but we didn’t have low conviction investors. We weren’t the super-hot deal where people just wanted to get in because Tiger Global is here or something,” Larsen said. “[Our investors] weren’t here just because other people were in. They were in because they really liked the team and the business. We weren’t any individual token that had some rug pull that just explodes the whole value proposition…nothing changed materially about the business.”

5 crypto tax tools that could save your ass on Tax Day

April 1, 2022

5 crypto tax tools that could save your ass on Tax Day

If you’re among the 16% of Americans who transacted with or traded cryptocurrency last year, you’re probably breaking a sweat about the looming deadline to file your taxes (that’d be Monday, April 18). And if you’re an NFT aficionado who changed your Twitter profile picture to an image of a hexagonal, nonchalant monkey, chances are that you’ll want some professional advice while filing.

The U.S. Internal Revenue Service is likely to intensely scrutinize, and perhaps even audit, those who transacted with virtual currency this year, Alex Roytenberg, known on Twitter as @TheNFTCPA, told TechCrunch.

“I personally think the IRS was waiting for a big year of wealth and income to be generated, and 2021 was definitely that year,” Roytenberg said.

He added that because of the lack of formal guidance from U.S. regulators on how to file taxes on various crypto products, the process requires the taxpayer to interpret how existing laws intended to regulate traditional assets might apply to entirely new technologies.

Roytenberg, a certified public accountant, has been a tax accountant for nearly 20 years, working at Morgan Stanley, Goldman Sachs, and PwC. Roytenberg first got exposure to the web3 space in 2018 after advising a number of Coinbase employees, and since then, has aimed to double down on the specialty, co-authoring the “NFT Tax Guide” and speaking at industry events including NFT.NYC.

While Roytenberg recommends that avid crypto traders seek professional, one-on-one tax advice to clear up any gray areas, he also shared his thoughts with TechCrunch on a number of crypto tax prep packages that can be useful for filers this year.

Here’s a rundown of some of the more popular platforms available to crypto tax filers today.

January 27, 2022

Crypto investors have 1099 problems, but Cointracker helps make sure filing taxes isn’t one

The upcoming tax season is likely to prove particularly complex for crypto investors, many of whom will be paying taxes on their crypto holdings for the first time ever. In the US, the crypto industry will also grapple with new rules in the recently-passed $1.2 billion infrastructure bill that apply to digital assets, including a requirement for crypto exchanges to disclose their gains and provide the names and addresses of their customers.

Exchanges are doing their part to prepare for the impending filings. Coinbase, one of the world’s largest crypto exchanges, announced an exclusive partnership earlier this week with crypto tax and portfolio tracking provider CoinTracker, meaning Coinbase users will get access to CoinTracker’s software at a discounted price.

Over 3% of the entire global cryptocurrency market, representing over $50 billion worth of digital assets, is tracked on CoinTracker, its CEO and cofounder Jon Lerner told TechCrunch in an interview. The platform allows users to see all their crypto activity, including NFTs and decentralized finance (DeFi), in one place. Over 100 different exchanges and dozens of blockchains are integrated natively on CoinTracker, making it easy for users to gain a full picture of their crypto holdings, Lerner said.

The company announced today that it has raised a $100 million Series A round led by Accel, valuing the company at $1.3 billion. Both existing and new investors participated in the Series A, including General Catalyst, Initialized Capital, Y Combinator Continuity, 776 Ventures, Coinbase Ventures, Intuit Ventures, Kraken Ventures, and a number of prominent angel investors from fintech and crypto companies.

CoinTracker’s interface on desktop and mobile Image Credits: Cointracker

CoinTracker last raised $1.5 million for its seed round in 2018, which is when Lerner noticed the crypto markets evolving in a significant way.

“Back in 2018, there were a few top exchanges, and people were starting to play with Ethereum. Now, DeFi and NFTs have become really big. We’ll continue to see a proliferation of use cases in crypto,” Lerner said. He hopes to use the funding to broaden CoinTracker’s breadth and depth of integrations to support as many use cases as possible.

CoinTracker plans to use the funding to scale to ten million users in the next three years, Lerner added, though he declined to share how many users it has today. It also plans to expand its team, starting with two new hires it announced in conjunction with the fundraise – a new head of engineering and product lead, Gaurav Garg and Zack Reneau-Weeden. Garg was formerly a VP of engineering at Uber and Google and Reneau-Weeden was head of product at Robinhood’s crypto arm, according to the company.

The company grew its team from 10 people at the start of 2021 to about 40 people today, Lerner said. He expects CoinTracker’s headcount to grow to 100 people or more by the end of 2022.

While CoinTracker’s portfolio tracking functionality has users across the globe, its technical support services are currently only available to customers in the US, UK, Canada and Australia. Portfolio tracking on the platform is free to users who only need basic functionalities, and is available to customers with a broader set of needs starting at $14 a month.

For US-based users with relatively simple crypto holdings, an annual tax plan with CoinTracker is free. The company’s paid tax offerings range from $49 per year to “multiple hundreds” depending on the complexity of the user’s portfolio, according to Lerner.

The portfolio tracker enables the tax functionality by collecting the data a user needs in order to file year-round and allowing them to file with the click of a button, Lerner said. The product’s ease of use has been the biggest driver behind its traction, he noted.

When asked about the risks facing the company, Lerner said the biggest one is that the crypto industry as a whole may not become tax-compliant in time to avoid being hit with penalties and audits. A lack of awareness and education about how to pay taxes on digital asset holdings is one of the biggest hurdles for users, he added.

“It’s kind of our job to help people make an informed decision on how to do this reasonably. We just take the friction away and make it super easy. You just connect your wallets, connect your exchanges, everything, retroactively, and going forward it is automatically synced. We’ll put in smart defaults,” Lerner said. “If you’re a power user, or you’re working with a CPA, you can go in and tweak those advanced settings. But taking a reasonably smart default approach takes the friction away.”