A NOTE FROM FORTUNE

In recent years, venture capitalists bet big on crypto and it paid off handsomely as some firms posted returns of 10x or more. But then the market turned, and now many of these same VCs are in a world of pain—and it’s not just because of a drop in the price of cryptocurrency.

It turns out the world of crypto investing, which involves startups handing over tokens rather than equity, is a double-edged sword. In good times, the volatile and highly liquid nature of tokens means VC firms can cash out early and often, and deliver spectacular profits for their limited partners (LPs).

But in bad times, that easy liquidity means tokens can crash spectacularly. And because everything is transparent on a blockchain, and transactions are frequent, there is no way for VCs to let the dogs in their portfolio go undetected for months—or even days. Worse, many LPs are new to the hypervolatile nature of crypto, and are not enjoying the ride. The VCs holding their money are getting an earful.

“We continuously have to educate the family offices who are, like, a shipping family industry from Vietnam,” one VC recounts. “They’re like, ‘What the hell did you do? You were 6x up!’”

In a groundbreaking investigation, Fortune‘s crack venture and crypto reporters, Anne Sraders and Leo Schwartz, look under the hood of the VCs riding out Crypto Winter, and share the experience of once-high-flying firms like Andreessen Horowitz, Paradigm, and Tiger Global.

Read the whole account below.

JUNE 1, 2023

REAL ESTATE

How the work-from-home trend could trigger the next banking blowup

Thousands of square feet of empty office space are creating a crisis in commercial real estate—and a potential meltdown for small and midsize banks.

DIVERSITY & INCLUSION

This Supreme Court case could spell the beginning of the end for affirmative action. It’s a looming crisis for corporate America

“After this you’ll really be able to identify who has always been on board and who never really was,” says one diversity, equity, and inclusion specialist.

LEADERSHIP

For the next generation of star CEOs, experience alone isn’t enough. Here’s what they need to reach the top rung

Vulnerability, humility, and self-awareness are among the qualities that high-potential first-time CEOs must cultivate.

Salesforce picked one of its own execs to become Slack’s CEO. Now she’s patching up a $27.7 billion marriage

Brazilian-born Microsoft alum Lidiane Jones has a wealth of experience in navigating culture clashes.

A.I.

Rihanna singing or an A.I.-generated fake? The music industry is threatened by the latest buzzy technology

The recording industry is at war against artificial intelligence that can mimic the voices and styles of musical artists.

FINANCE

A Texas university created by Palantir cofounder Joe Lonsdale and journalist Bari Weiss has raised some $150 million to teach ‘forbidden courses’ by people like Marc Andreessen

The University of Austin is being funded by tech bigwigs and others who think academia is broken.

The Money Doctor who has slayed inflation for 50 years says the Fed has overcorrected so badly it’s hastening the long-feared recession

The Fed’s monetary squeeze “is aimed at a problem that’s over, and the effect from here will be to hammer consumer demand and economic growth,” predicts Steve Hanke of Johns Hopkins.

Here is how much entry-level associates make at top VC firms, according to 5 VCs

Understand what the salary range is for your position so you can skillfully negotiate.

PERSONAL FINANCE

Getting rich is ‘surprisingly simple’ if you follow a 3-step strategy, says an expert on self-made wealth

There will always be a limit to how many expenses you can cut. But there’s no limit to how much you can earn.