CoinFund taps ‘deal guy’ as first head of venture legal

Cryptocurrency-focused investment firm CoinFund has bifurcated its in-house legal team, betting on one incoming attorney to drive portfolio company deals and keeping in place the business’ general counsel to oversee more traditional functions.

Maintaining two attorneys at an executive level isn’t exactly commonplace among crypto fund operators — even ones running both liquid and illiquid venture capital strategies.

CoinFund’s recent hire of Dilveer Vahali in the newly created position of head of venture legal represents the firm’s bid to draw a line in the sand between the business needs of both verticals.

Vahali last worked for the Chermin Group, a private investment firm that counts crypto companies on its funded list, and before that spent time as a partner at Kirkland & Ellis LLP, where he worked with private equity firms and merger and acquisition initiatives.

It appears, though, that CoinFund General Counsel Stewart Eichner, who also holds the title of chief compliance officer, is set to continue to play a role in operations across CoinFund’s business lines.

Vahali at CoinFund has been tasked with “being the deal guy,” he told Blockworks, intending to blend his experience from the competitive world of closing large scale private equity transactions with a crypto-native approach. Private equity investing has a more established set of norms around legal needs and compliance, he said, including differentiating between in-house and external counsels.

“In traditional private equity, you have the legal folks, the general counsel, the folks who are managing the legal processes,” he said. “In crypto, and because CoinFund is evolving so quickly, it was kind of to fill this hole with somebody who can take deal execution back from the business team and oversee our portfolio companies and be a sounding board when they have questions.”

CoinFund, which operates venture capital funds and a liquid hedge fund that invests in tokens, recently raised $158 million for a new venture fund, Seed Fund IV, capping off a steady year in which the firm appeared to have avoided a number of the missteps of its competitors through choppy markets and whipsawing venture valuation.

Portfolio companies looking for legal help

This year, the firm’s executives, including President Chris Perkins, have also engaged in discussions concerning the US regulatory landscape, advocating for stablecoin legislation and other key initiatives.

Vahali said his role combines legal needs with business functions, with the aim being to provide portfolio companies with the means and know-how to quickly close on new business opportunities. It’s also intended for the attorney to be available as a legal sounding board for companies, often operators too nascent and without the capital to justify shelling out on their own legal expertise.

“It’s even less of us telling [portfolio company founders] what to do,” he said. “A lot of the companies we invest in are early stage, so just having a lawyer that they can talk to, it’s like, ‘Hey, I got a call the other day about credit card processing in the United States from a foreign business.’ They are like, ‘Do you know folks who can do that?…What’s the process?’”

Managing Partner David Pakman, CoinFund’s head of venture investments, pushed for the creation of the firm’s venture legal role, citing increased deal flow, in part, for the new position.

CoinFund has invested in more than 100 crypto companies, many of them early-stage, including backing in June the $10 million seed round of Neutron, a DeFi blockchain protocol.

With crypto markets continuing to bank on a continuing recovery this year, Vahali said he’s noticed an uptick in merger and acquisition activity as of late.

“What I can tell you from my vantage point is I have seen activity pick up, and I’ve seen more founders coming to us, more potential deals coming in,” he said. “I still think it’s not where it was in 2021, when we were going gangbusters, [which then] flushed out a lot of folks who maybe weren’t in crypto for the right reasons.”

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