Dragonfly's Haseeb Qureshi: AI funding mania mirrors crypto's 2020, names Venice and Zcash as top picks

AI mania today looks like crypto circa 2020-2021, Qureshi says

Haseeb Qureshi, managing partner at Dragonfly, opens by comparing the current AI investing boom to crypto's earlier frenzy. He describes San Francisco AI fundraising as "super social, no DD thing," with "checks flying out the door" and "term sheets written on napkins." He says valuations are being handed to "neolabs that have just four guys and an idea."

Asked when this reminds him of crypto, he places it at "maybe 2020," adding "it gets crazier before getting sad for a while." He points to the scale of AI data-center buildouts and debt, noting Anthropic's compute commitments of "something like 500 billion," and warns that a dip in demand would make "the math" hard to work for labs carrying that obligation.

"It's human nature. It's just like this is what happens when people are really excited about something and they feel they have to get involved." — Haseeb Qureshi

Winning deals is about access and brand, not just picking right

Qureshi lays out what he calls a "ladder of skills" in venture: deal flow, analysis, picking, and finally winning. He argues picking is "only halfway up the ladder" because many firms can identify a winner like OpenAI but still lack "a seat at the table." Winning the deal, he says, is the scarce skill.

He explains that investors at large firms such as a16z or Sequoia are "renting the brand" of the firm, while smaller or independent investors must build their own public brand to compete. He calls this "the number one thing that is going to make you successful in VC."

"If you are not at one of those places, then you got to make the brand." — Haseeb Qureshi

Early bets: NEAR, pivoting from AI founders in 2018

Qureshi says Dragonfly co-led NEAR's seed round in 2018, when the project was called Near AI and was founded by Ilia, a co-author of the Transformers paper, alongside Alex. He says the founders pivoted from AI to blockchain after concluding Ethereum's engineering was amateurish, and that Dragonfly initially passed on their pitch before the founders returned the next day with a revised protocol addressing every objection.

He says Dragonfly still holds NEAR because "we believe in the team" and the "job's not done," noting NEAR's current focus is as a cross-blockchain exchange allowing trading across chains from one account. He contrasts this with NEAR's original Ethereum-killer sharding thesis, which he says succeeded technically (reaching production before Ethereum's own sharding plans) but didn't drive adoption the way hoped.

Ethena's seed round came right after Terra's collapse

Qureshi says Dragonfly led Ethena's seed round in what he believes was 2022, immediately after the Terra/Luna collapse, when "people thought obviously DeFi is not investable now." He says founder Guy had seen a predecessor protocol, Lemma Finance (which Dragonfly also backed), fail because onchain perpetuals lacked enough open interest, and realized that exchange custody practices had shifted enough (via providers like Fireblocks and Anchorage) to let Ethena solve counterparty risk by operating partly offchain.

He says Dragonfly still holds Ethena's token, arguing demand for yield on dollars will grow as the Genius Act bars regulated US stablecoins from paying yield directly, leaving a gap Ethena is positioned to fill "as demand for dollars increases around the world."

Variational and Hyperliquid: betting on the RFQ model for onchain trading

Qureshi says Dragonfly backed Variational's seed round on the strength of founder Lucas, even though the firm doesn't usually invest in market makers. After Variational pivoted post-FTX toward an RFQ (request-for-quote) trading model for onchain derivatives, Dragonfly led a later round reportedly at $50 million. He argues RFQ is the only viable model for scaling real-world-asset trading onchain, since "there's no way" to build deep onchain order books for thousands of traditional-finance symbols.

On Hyperliquid, Qureshi says Dragonfly pitched founder Jeff at a $600 million valuation pre-TGE and was turned down, as Jeff declined offers from several VCs, including some above $1 billion later. He says this self-funding conviction is "the number one thing you want to look for in a founder." On taking profits, he says Dragonfly's roughly ten-year fund cycle gives latitude to hold winners, citing Polymarket, where Dragonfly invested at a $175 million valuation while a reported new round values the project near $21 billion.

Top current conviction: Venice for AI privacy, Zcash as "insurance" on Bitcoin

Asked for the asset he believes in most right now, Qureshi names Venice, a privacy-preserving AI inference platform growing "10% month over month" and now "well over 100 million revenue run rate," up from roughly 15 million when Dragonfly first spoke to them. He argues AI chat logs currently carry no legal privacy protection in the US under the "third party doctrine," meaning logs can be subpoenaed without a warrant, and frames Venice as building "that VPN for AI."

On Zcash, he describes it as "a privacy preserving version of Bitcoin" and repeats a framing he attributes to Naval that it functions as "an insurance policy on your Bitcoin," both against seizure and against a potential break in public-key cryptography, referencing OpenAI's reported mathematics results and speculation about AI-assisted cryptography research. He suggests sizing a Zcash position in proportion to one's perceived risk in Bitcoin, though he avoids giving a specific allocation.

"The more you worry, the bigger your insurance policy ought to be." — Haseeb Qureshi

What would make him bearish on crypto

Qureshi, describing himself as someone who stayed optimistic through recent bear markets, says two things would shift him toward bearishness: a "betrayal of our core values," meaning crypto giving up on being an alternative to existing systems, and a loss of the industry's culture of experimentation. He explicitly rejects the idea that institutional adoption and ETFs (including products wrapping Zcash) dilute cypherpunk values, arguing institutions are "running on the cipherpunk rails," not the reverse.

He contrasts Sequoia's continued crypto investing despite its FTX exposure with other FTX-adjacent investors who left the space entirely, calling that persistence "the essence of Silicon Valley."

"That culture is a very important and sacred culture. And I think if you lose that, that would make you more bearish on crypto." — Haseeb Qureshi