Early Riders 2026 Whitepaper

Link to the full Research in PDF

Introduction

Early Riders is the venture firm pioneering bitcoin as the hurdle rate. Early Riders is raising the first investment fund that uses Bitcoin as its unit of account: capital is raised in Bitcoin, deployed in Bitcoin, and returned to Limited Partners in Bitcoin. The fund will invest across early-stage opportunities in Bitcoin, AI, open-source technologies, and the broader private investment ecosystem. Carried interest is only charged on returns exceeding bitcoin’s own return with a 25% premium (1.25x BTC), aligning interests with investors. This is how we see the future of all capital allocation over time: bitcoin as the base unit in any hurdle rate, with additional compensation for operational and liquidity costs of capital incorporated into the calculus.

We believe that Bitcoin represents the purest form of sound capital, and that the next wave of transformational businesses will be built by recognizing and leveraging its unique monetary properties. To date, private investment around Bitcoin has largely focused on Bitcoin infrastructure companies. In reality, ALL companies can benefit from sound money. Yet little attention has been put on applying Bitcoin’s transformational properties to the wider private markets. Every company needs Bitcoin, and Early Riders aims to set that change in motion.

Given Bitcoin’s historical performance and unique store-of-value characteristics, outperforming it through conventional business activity alone is exceptionally difficult. To create value when Bitcoin is the hurdle rate, companies must integrate Bitcoin into their operations, whether through treasury management, strategic investments, or by offering Bitcoin-related products and services. A Bitcoin earned today is likely to be worth more in the future. Businesses can “mine” depreciating fiat cash flows and convert them into the hardest money human society has ever produced.

We will provide Bitcoin to businesses in exchange for equity, while helping founders internalize the opportunity cost of deploying Bitcoin from their treasuries. In practice, any decision to convert Bitcoin to fiat, whether for a project, investment, hire, or initiative, should target an annualized return above bitcoin itself. If, on the other hand, an investment cannot return more Bitcoin than is invested or spent, it is rational simply to hold Bitcoin instead. This approach enforces disciplined capital allocation and rewards efficiency. The result will be faster paths to cash-flow positivity, more efficient balance sheets, and the creation of fundamentally sound businesses built to endure.

Capital Allocation Under The Early Riders Standard

Sound investment begins with sound money. Under a fiat standard, cash steadily loses value through monetary debasement at a rate that has historically averaged 5–7% per year. Faced with negative real returns to holding cash, entrepreneurs are driven to chase growth for its own sake, deploying capital into marginal ventures or speculative moonshots simply to stay ahead of monetary inflation. The availability of subsidized credit amplifies the problem: borrowing fiat becomes more appealing than raising equity, encouraging fragile, debt-fueled balance sheets that expand rapidly but collapse just as fast when conditions tighten.

A Bitcoin standard inverts these incentives. Holding Bitcoin carries a real opportunity cost, as its purchasing power grows over time through its adoption as a store of value and through growth in human productivity. The steady debasement of fiat adds a nominal return on top of Bitcoin’s real return. This opportunity cost forces a more disciplined approach to capital allocation. Every Bitcoin spent today must be justified by the expectation of earning more Bitcoin tomorrow. An enterprise that returns 12% per year might sound enticing to a capital allocator whose opportunity cost is the S&P500’s historical 9–10% CAGR, but it represents value destruction to an investor who can just as readily hold Bitcoin.

In other words, holding Bitcoin lowers an investor’s time preference. Time preference is the degree to which someone values present consumption over future consumption: a high time preference favors immediate gratification, while a low time preference values patience and a delayed, but greater, reward. Individuals and societies with low time preferences make sacrifices today to build businesses, institutions, and monuments that will endure for generations to come.

Raising the hurdle rate rewards entrepreneurs who prioritize profitability, efficiency, and genuine value creation over subsidised growth or market share. Under a hard-money regime, wasteful spending becomes self-correcting: deflationary pressure rewards prudence and penalizes excess.

Businesses which expand an addressable market by creating cheaper and / or superior offerings for customers and are able to capture the value will be rewarded with more capital should it be desired. Meanwhile, the businesses which show no demonstrable way to create and capture value will see funding dry up quicker on a bitcoin standard relative to a fiat standard given the elevated cost of capital. Business formation and value capture does not fundamentally shift from a fiat standard to a bitcoin standard, but the performance of capital allocation is magnified.

The exuberance of the ZIRP era, culminating in the speculative bubble of 2021, produced fragile businesses. A Bitcoin-based system produces the opposite: Bitcoin enforces capital efficiency, encourages positive unit economics from day one, and rewards builders who generate real cash flow rather than rely on perpetual funding rounds. Sound money produces sound businesses with profitable business models and solid balance sheets.Bitcoin Thesis

At Early Riders, our Bitcoin thesis is founded on the conviction that Bitcoin is a transformative force reshaping finance, business, and technology. It has been the best-performing asset class since 2011, with adoption accelerating across individuals, businesses, and the top capital allocators. The mainstream has started to recognize the value of scarce assets in a world of spiralling debt, deficits, and off-balance sheet liabilities. In a world of increasingly fractured geopolitics, counterparty risk and censorship resistance has become once again a serious consideration. Gold’s recent performance is a testament to the importance of money that is not anyone else’s liability. Yet we are still early in Bitcoin’s monetization curve: few investors or businesses have fully leveraged its dual nature as a superior store of value and as a programmable technology layer.

As central banks persist in debasing fiat currencies, Bitcoin’s decentralized, fixed-supply system offers a refuge for savers and businesses. Its superior monetary properties encourage delayed gratification and long-term thinking, lowering investors’ time preference and fostering sounder capital allocation. As individuals experience holding Bitcoin over a longer period of time, they tend to progress from viewing Bitcoin as a speculative trade to recognizing it as a reliable store of wealth, then ultimately as a benchmark unit of account and the most rational hurdle rate for investment decisions.

For businesses, this shift is profound. Preserving surplus productivity and energy has long been a challenge: the interest paid on cash usually does not keep pace with monetary inflation, while paying out cash via share buybacks and dividends merely transfers the problem of fiat debasement to shareholders. Taking on debt allows businesses to benefit from debasement by tapping into a cost of capital which can be artificially lower than the opportunity cost, but this introduces fragility and the risk of insolvency.

Bitcoin provides a sound, liquid, and incorruptible treasury asset, superior to cash, bonds, or gold over long horizons. Its asymmetric risk-reward profile and provable scarcity make it the optimal reserve asset for companies seeking durability in an unstable monetary system. Bitcoin offers an opportunity to save value in a scarce asset until the company has a great opportunity to generate a return on their bitcoin. Ignoring bitcoin represents a significant risk given the risk of competitors saving capital in an appreciating asset versus a depreciating asset. The results will allow increased flexibility and capital allocation options for the company saving in bitcoin, all else being equal.

Beyond its monetary role, Bitcoin is also a technology platform still in its early innings, with a plethora of business models around the network and technology, some of which have not even been conceived yet. Bitcoin will become a foundational monetary network, a neutral base layer for value transfer and enterprise innovation. The builders who understand this early will help shape the next era of global commerce.

Why Raise, Deploy, and Return In Bitcoin?

Two decades of artificially low interest rates have distorted the cost of capital, driving inflated valuations, excessive leverage, and unsustainable growth. Nominal fiat returns have masked weak real performance, and allocators have been rewarded for financial engineering instead of real value creation. Indeed, most venture capital funds have destroyed value in Bitcoin terms, since their LPs would have been better off owning spot Bitcoin instead of locking up their capital in VC funds. It is time to rethink how returns are measured and reported.

Investment performance has long been measured in fiat terms, typically USD. Yet fiat is an unreliable yardstick: more than twice as many dollars exist today as in 2015, so it is misleading to compare dollars today to dollars a decade ago. Similarly, promising an LP more dollars ten years from now is incoherent, because no one can credibly state what those dollars will be worth in real terms or how many new units will be created over the next decade. Like Wittgenstein’s ruler, the measure reveals more about its own distortion than about the object being measured. Bitcoin, by contrast, offers a fixed supply and a common language for value. Recognizing the importance of this shift, Early Riders has adopted Bitcoin as its unit of account.

By raising, deploying, and returning capital entirely in Bitcoin, Early Riders ensures that all stakeholders, whether GPs, LPs, or founders, operate under the same sound monetary standard. Every investment is judged not against fiat benchmarks, but against the alternative of simply holding Bitcoin. This discipline rewards prudence, filters out misallocation, and builds businesses resilient enough to thrive in the deflationary economy of the future.

Timing Matters: Why Now?

Bitcoin is quickly becoming accepted as a store of value that is here to stay. The well known public detractors have mostly capitulated. The durability of Bitcoin’s open source code and distribution of network participants appears to satisfy many investment participants. The proposal and implementation of over a dozen nation state strategic bitcoin reserves, wide acceptance of bitcoin as a retirement and savings asset through ETFs, and its adoption by hundreds of enterprises as a savings technology, has cemented it as a serious savings tool.

Despite its recent growth, the majority of those interested in bitcoin still view it as speculative: a tool valuable for high velocity trading or a gamble that may disappear. Most of the products and services offered by the industry reflect that sentiment. However, we are likely upon the precipice of the institutionalization of bitcoin, meaning that within a decade, bitcoin will be synonymous with savings, and banks will view bitcoin as a new savings account. Yet, very few are willing to accept that bitcoin will be a reserve asset. Because of the disconnect, massive holes have emerged in the space for creating companies and the infrastructure needed to fulfill growing needs of the space.

A select number of founding teams seriously view Bitcoin as a savings technology and reserve asset, and accordingly are focusing on delivering best-in-class products for everything from custody, trading, lending, prime brokerage, OTC trading, corporate treasury, structured products, and securitized bitcoin. For teams that can deliver on that mission, there are outsized rewards to be gained, as the total addressable market should increase significantly over the next decade.

Given the current market capitalization of bitcoin is over $2 trillion today, we believe one of the few metrics which will grow faster than the USD/exchange rate of bitcoin over the next decade will be the adoption rate of the financial services needed to interact with Bitcoin. The teams building these products will benefit from outsized returns in terms of projected free cash flows, public markets appetite, and acquisition opportunities since the number of both strategics and sponsors looking to acquire businesses in the bitcoin industry should increase dramatically as the price grows.

The creation of better products and services with secure and simple interfaces will increase the addressable market of customers, and thus the value which can be captured by those offering excellent bitcoin financial services.

Right now is the most exciting time for a bitcoin denominated fund. For now, Bitcoin is mostly treated as a speculative investment, but over the next decade, it will become increasingly recognized as a core reserve asset.Embrace Deflation

The natural state of the world trends towards producing more efficient outputs, in terms of time, materials, and cost. The collective knowledge and output of individuals and organizations allows society to do more with less.

Without infinite capital, businesses initially create relatively high cost products / services, and have poor efficiency. However, through customer feedback, process quality control, and the implementation of tools, variable unit costs decline. The lower unit costs allow the business to pass along savings to customers, and thus increase the potential throughput, or use the saved capital to pass back to capital partners or enter new markets.

Denominating goals and hurdle rates in a finite unit like Bitcoin makes efficiency visible and valuable: every hire, tool, and dollar spent must clear a stricter bar. Startups that hold a Bitcoin treasury and run lean can avoid perpetual fundraising, reduce dilution, and concentrate on building. For mature firms, appreciating purchasing power expands strategic optionality through hiring, CapEx, and acquisitions that can be sequenced from strength rather than urgency.

This shift reshapes venture and operating playbooks. Capital will prefer businesses with high contribution margins, low overhead, limited working-capital needs, and products that compound brand and network effects, rather than scale-at-any-cost models with weak unit economics. Sharing cost centers, using part-time and on-demand talent, and continuously re-engineering processes with AI and software becomes the norm. Outperforming Bitcoin is hard; the way to do it is to harness deflation, build with fewer resources, ship faster, and let a sound monetary base reward genuine efficiency. Deflation isn’t a danger to be managed; it’s the dividend of progress we should capture. Bitcoin is the best way to capture it.

Theme: Bitcoin Is the Hurdle Rate

In the evolving financial landscape, debt risks have transcended industry-specific concerns and now pose a challenge at the sovereign level. As we navigate the coming decade, caution becomes critical for startups, legacy businesses, and capital allocators. Our investment philosophy emphasizes the recognition that Bitcoin is no longer an optional consideration, but a crucial element for businesses to maintain strategic relevance as we see currency debasement and debt levels accelerate.

Bitcoin’s performance in the recent interest rate hiking cycle has shown it remains a strong benchmark for success and the ultimate tool for preserving one’s purchasing power. Going forward, businesses that assess investment options by comparing the projected performance against Bitcoin will be better positioned to ensure that their energy or capital is directed properly.

As a result, the future state of every company will require Bitcoin fluency. This doesn’t necessarily mean being a 100% Bitcoin-centric business, but operators need to understand how the utility of Bitcoin will add value to their business. Many legacy enterprises will start by sweeping excess cash flows into a Bitcoin treasury (lowest-hanging fruit), but will subsequently adopt the Bitcoin Network as they become more attuned to the advantages of its permissionless monetary rails capable of low-cost, near-instant, final settlement. Meanwhile, Bitcoin-native businesses will be the first to incorporate the asset, the network, and future layers as the network scales.

The advent of the Internet gave birth to the notion of “Internet companies”, which in time became redundant, as all companies ultimately realized they needed to leverage the technology to remain competitive. The same will be true for emergent deflationary technologies like AI and Bitcoin; all companies are “AI companies” and “Bitcoin companies” whether they know it yet or not.

With more businesses utilizing Bitcoin, the utility will naturally improve and evolve to provide additional use cases. This will present entrepreneurs and existing companies with an immense opportunity to build products and services on the adjacencies of Bitcoin. The successful projects will not only ride the appreciation tailwinds of Bitcoin (the asset), but also benefit from increased adoption of the Bitcoin Network. These investment outcomes are capable of outperforming Bitcoin’s appreciation and thus, the Bitcoin hurdle rate.

Companies that choose not to engage with Bitcoin will continue to struggle in the fiat world of debasement and non-real returns. These organizations will see Bitcoin-forward competitors thrive while they struggle to grow their businesses in a meaningful way. Non-adopters will struggle to preserve excess productivity using traditional balance sheet assets and fiat-denominated outcomes, ultimately capitulating to Bitcoin or being purchased by a Bitcoin-minded competitor.

Theme: Bitcoin Will Change Capital Stacks

Before Bitcoin, businesses were forced to rely on weak fiat money as the foundation of their capital stack. Heightened recognition of inherent counterparty risk, unlawful bank restrictions, and mathematically-guaranteed debasement, have made holding fiat as a store-of-value asset increasingly unattractive. As a monetary asset, Bitcoin improves upon these pitfalls of fiat by allowing users to minimize counterparty risk and verifiably avoid debasement. As such, we are now in a transitional period where many companies will benefit from holding significant Bitcoin positions to store their value, and opportunistically converting to USD for expenses.

With the advent of Multi-Institution Custody (pioneered by Onramp Bitcoin, Early Riders’ first portfolio company), businesses can now safely hold Bitcoin on the balance sheet while protecting against historical custodial mishaps (e.g., lost keys, theft). With this solved, companies can be confident that their assets are secure while focusing their attention on running their business and appropriately position-sizing their Bitcoin allocation.

With the advent of safe, secure, and scalable custody for the first time, companies can start to hold better money in their balance sheet en masse. The solving of custody will generate more productive uses of capital across balance sheets, and increasingly drive bitcoin adoption across businesses of all sizes.Further, founders who choose to raise in Bitcoin will no longer need to spend half of their time on capital raising. In the near future, we expect scenarios where founders and their investors will raise capital in fewer tranches, as they’re able to extend runways by storing value in Bitcoin. This will empower founders by preserving their ownership, allowing them to pursue value-accretive initiatives and remain focused on building. Meanwhile, early investors benefit by maintaining a meaningful stake in the companies while keeping the capitalization table lean.

By ossifying businesses on a Bitcoin standard, we anticipate a significant reduction in the number of investments that go to zero, as the capital base is fortified and better preserves purchasing power over longer periods. This strategy necessitates careful capital deployment and prudent allocation decisions, but fosters financial resilience.

As businesses generate revenue, excess profit will be swept into a Bitcoin treasury, representing the foundational component of their Bitcoin strategy. Moreover, these companies will leverage Bitcoin as a payment rail to take advantage of Bitcoin’s borderless/permissionless properties, increasing their accessible TAM and opening up new frontiers for global business.

The future integration of Bitcoin into payroll, retirement, vesting options, and other capital flow needs are large market opportunities that will require new businesses to be built in order to catalyze the usability of Bitcoin on a day to day basis.

The earlier businesses can sweep Bitcoin into their treasury, the better positioned they will be for long-term success, as excess productivity is fortified and compounded through Bitcoin’s unique monetary properties. Further, operators must consider the go-forward appreciation of Bitcoin as their hurdle rate, tightening the fidelity in determining where Bitcoin is spent. The perspective that a Bitcoin spent today must yield returns ranging from 1.1x to 1000x in the future fundamentally alters investment decision-making and ultimately, the entire capital structure.

Theme: Do More With Less

Since 2004, the correlation between Seed and Series A valuations/funding rounds and M2 money supply growth has been tightly correlated to the upside. Simultaneously, the cost of starting a business has seen a consistent decline across developed/developing economies.

Recent decades, characterized by artificially low interest rates and excessive money creation, have allowed the flaws of bloated raises to become apparent. Despite huge gains in productivity and tooling, companies can generate more revenue with fewer employees. Nevertheless, capital allocators created a frenzy of fundraising and companies raised at enormous valuations. Too much cash liquidity can overwhelm individual balance sheets, undermine productivity, distort proof-of-work principles, and encourage short-term thinking. Companies are largely focused on deploying capital to “show” growth, as opposed to prioritizing the creation of actual value.

Bitcoin, recognized as the best form of money, offers superior “oxygen” for businesses. It is the hardest money ever created and its monetary properties will allow businesses to do more with less. By utilizing Bitcoin as a store-of-value, businesses can bolster their strategic optionality. Current private investment methodologies will pump companies uncomfortably full of liquidity, causing the organization to feel constant pressure to deploy capital versus taking a calculated, scarcity-minded approach. Founders with a proper Bitcoin strategy have the ability to reject certain projects and concentrate their efforts on mission-critical initiatives.

In the future, successful founders will focus on building with smaller teams, optimizing unit economics at an earlier stage, extending runways, and decreasing time to cash flow positivity. Further, AI and deflationary technologies will allow companies to accomplish far more with fewer employees and resources. As a result, we should see many more Craigslists, versus WeWorks, Limes, or Pelotons, that prioritize growing their Bitcoin treasury. We believe lean, billion-dollar companies can be built on the back of the best form of money while attracting the best talent that aligns with this philosophy.

Theme: Every Company Is a Bitcoin Miner

Bitcoin miners are in the business of accumulating as much Bitcoin as possible. They invest significantly in capex, hashrate, and operations in exchange for block rewards. Bitcoin miners operate in the ruthlessly competitive global market for hashrate and many must sell the vast majority of the Bitcoin mined to fund operations.

Businesses outside the Bitcoin mining Industry are in many ways better suited to develop sustainable competitive advantages, moats, and defensible streams of free cash flow to accumulate Bitcoin. Broadly speaking, there are many companies with lower theoretical costs for producing a Bitcoin that have the flexibility to retain a large portion of their mined Bitcoin. Therefore, all companies can be Bitcoin miners.

Drawing parallels with industry giants like Apple and Google fortifies our thesis. With approximately $100 billion and $75 billion in annual free cash flows, respectively, these companies are akin to the world’s best Bitcoin miners but they aren’t yet participating.

Businesses with operational excellence, minimal downtime, and healthy unit economics underscore the potential for businesses to channel excess free cash flows into Bitcoin (i.e., proof-of-work). In many cases, these businesses are more efficient at “mining Bitcoin” than the industry leaders but they haven’t realized they are Bitcoin miners disguised as traditional companies.

Just as it is easier for a miner to mine a Bitcoin today than in the future due to the global expansion of hashrate and halving dynamics, it is also easier for a business with positive free cash flow to “mine” Bitcoin today, than it will be in the future. Companies with stable free cash flows gain a competitive advantage by leveraging Bitcoin’s network effects to increase their purchasing power. Thus the first-mover advantage of companies adopting the philosophy of considering themselves as “Bitcoin miners” stand to become category winners. We will back and build companies that embrace this philosophy.Venture

Early Riders differentiated itself as a team of seasoned builders rather than mere allocators. Our practical approach assesses market viability – ensuring services resonate with market demand and have the opportunity to be commercialized. Unlike traditional private investment strategies that are heavily inclined toward solely allocation, we recognize the challenges and importance of the arduous building process. In the current private investment landscape, there’s a reluctance to delve into hands-on efforts, but we embrace the challenges of getting our hands dirty to build the business alongside our founders – similar to the early days of Kleiner Perkins, Benchmark, and Sequoia. As we move towards a new era of private investment anchored on sound money, we believe that allocators with deep building experience will outperform mere allocators until it is a known standard; just as businesses that have a Bitcoin strategy will outperform those that do not.

Existing Bitcoin investment firms have predominantly concentrated on Bitcoin-specific enterprises. However, companies operating in the realms of Bitcoin, AI, and other technology-driven sectors stand to gain asymmetrical upside from the integration of a Bitcoin strategy.

Our focus will be on early-stage companies aspiring to establish themselves as category-defining entities. This approach involves harnessing the power of Bitcoin, talent, and deflationary technology to expedite their growth. We are open to engaging with active businesses that are potential candidates for acquisition, partnership, or co-investment.

Our strategy aims to enhance and expedite the journey to success by incorporating Bitcoin into partner companies. Additionally, the support of EIRs, Advisors, and Partners will be enlisted to provide expertise in legal, compliance, operations, sales, and talent, further fortifying our portfolio companies’ growth trajectory.

Current Venture Example: Onramp offers best-in-class financial services built on Multi-Institution Custody. The solution offers customers peace of mind in an industry which has been traditionally filled with hacks and fraud. The core custody offering additionally solves an issue of poor customer retention across the industry facing most businesses due to single points of failure and opaque custody.

Onramp builds Bitcoin financial products leveraging the protocol’s native properties of multisig, solving for the historical reliance on single counterparties, which hold unilateral control and prevented individuals and businesses from putting on their full positions. The investment has unlocked the ability for public companies, HNWIs, investment funds, and private businesses alike to hold their bitcoin in the most secure format, while still accessing best in class financial services.

Build

Numerous gaps exist in the current Bitcoin ecosystem, and our extensive experience in the field positions us to identify these readily accessible opportunities. Having operated and led Bitcoin companies, we possess valuable insights into areas where these opportunities may arise.

Drawing on our expertise, we not only pinpoint these opportunities but also identify the most suitable founders to spearhead these businesses. Our ability to source these opportunities is amplified through our expansive media reach and industry network, and the Guild.

The Guild is a collective of our investors, EIRs, Advisors, and Partners, who are at the top of their respective fields across entrepreneurship, traditional finance, and investment management who have successfully built companies from the ground up, uniquely positions us to understand the key elements required for success across diverse industries and verticals. Through Build, we leverage our entrepreneurial background, investor partners, and robust talent network to launch companies that address conceptual gaps in the market.

Many of the best and most successful companies which Early Riders invests in and builds will be due to our network of strategic investors, partners, and portfolio companies spotting gaps in the market. We expect the network to compound in value over time following Metcalfe’s Law as we get more of the best and brightest aligned with the Early Riders mission.

Further, Early Riders is developing The Stables, which is a four-week, fully-funded accelerator and builder residency located at their Texas Hill Country campus. Founders in the program receive focused funding (2–5 BTC) and in-residence support, including living arrangements, workspace, wellness facilities, and access to seasoned investors, operators, and industry peers, so they can escape distractions, rapidly build and commercialize a product. This immersive setup gives early-stage founders an edge by aligning business plans and operational roadmaps from day one, plugging them directly into deep domain expertise and community, thereby reducing risks and accelerating path to traction.

A distinctive aspect of our approach involves utilizing a modest amount of Bitcoin to fund the journey from idea to product-market fit, all while securing a meaningful ownership stake in the business – creating asymmetry for returns. This strategy aligns with our commitment to not only identify opportunities but also actively contribute to the success and growth of innovative ideas in the Bitcoin ecosystem and its adjacencies.

Author: Early Riders