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Key takeaways
Mastering Web3 Finance: Kevin Leuthardt on Building Successful FinOps and Navigating Token Challenges
In the latest installment of our web3 finance leader series, we’re featuring Kevin Leuthardt!
Kevin launched his career at KPMG Switzerland, and then joined Arweave as CFO in 2020. Since then he’s worked with various crypto projects in Head of Finance or fractional CFO roles. Most recently, Kevin is the founder of threek — a boutique advisory firm for web3 projects and investors.
Kevin and his team support web3 projects and investors as a “sparring partner” that prepares them for launching (and operating) token-based networks/protocols in a compliant, risk-controlled way. Their team brings a wealth of experience from years spent operating in web3 and traditional finance management, tax risk management, business ops, and regulatory compliance.
We chatted about →
→ Leaping from consulting to building web3 FinOps orgs
→ How to approach common token challenges (pre- & post-launch)
→ Avoiding some of the most common mistakes that projects make
→ 3 specific ways to add value to your org as a web3 CFO/finance leader
The journey from KPMG to web3
Kevin’s career began at KPMG Switzerland after he finished his tax law degree: “I originally worked with life science companies, then suddenly got the chance to join KPMG Switzerland’s crypto tax & legal advisory group.”
Joining Arweave as CFO in 2020 was an experience he credits as a “great learning opportunity for me, getting thrown into those cold waters at the end of the last crypto winter.”
Over the years, Kevin gained additional experience as a finance leader at other projects, including the KYVE Foundation, where he now sits at the board, and Safe (formerly Gnosis Safe), where he helped “structure all their finops from scratch.”
His return to the consulting world largely came from the desire to be the advisor he wished he had:
"I would’ve heavily appreciated someone on the side who knows how to run things, who can bring an embedded perspective. Basically, that’s what I do now. I take this 360 degree perspective, and serve projects in an external-yet-embedded role."
The biggest mistakes that most projects make (and how to avoid them)
Kevin outlined these 3 key mistakes that many projects fall victim to:
- Focusing on marketing over generating product traction
Regulators often look for any “threads of data" that they can latch on to, which is why, Kevin explained, “projects should think intentionally about their public communications or public marketing activities. Keep things low key, and stay focused on generating actual traction for your product, as opposed to just generating heated discussion.”
- Unresolved tax issues
Many web3 projects are “set up as remote projects, which means they face a variety of tax topics, including: Where does management happen? Where do you pay wage taxes? How do you handle false employment situations, when they come up? What about contract law that differs between countries and territories?”
All of these questions pose formidable challenges—especially for early-stage projects. Most of them “don’t have the means to consult with international advisory firms, so they work with an advisor—but oftentimes that advisor doesn’t have the background or experience to bring the full perspective to bear.”
- Treasury management
Kevin explained that oftentimes “to stay lean and effective, early-stage projects operate mostly with simple spreadsheets.” But, he went on, “if you’ve raised money, you’ll need to manage your treasury. You have a fiduciary duty to make sure you can answer questions like where exactly your assets are, who custodies them, what wallet has access to them, and what transaction types you support.”
Getting clear on this data is especially important before an “airdrops happens, or value is generated somewhere—you need to be sure exactly where the value went!”
How and when to integrate tokens into your project
Kevin works with various projects that have a token component, and he told us that it's often “an extra challenge that’s important to approach realistically.”
"Tokens are a great mechanism to attract and retain people interested in sharing in the creation of value, overtime. But it's imperative that you communicate what your token is, what it represents, and what it can and can't do."
Most projects generate hype around their launch (especially pre-launch)—everyone “feels excited about this token component, in addition to fiat compensation. And everyone’s interested to see how it’ll perform.”
It’s important, Kevin explained, to educate stakeholders about what it actually means to hold a token asset, “in terms of taxes, managing sell-pressure, and managing the public perception. Everything’s on-chain, so if suddenly your COO just halves their ownership, questions might come up, among your investors or your community.”
Tokens can be a powerful accelerator for crypto projects, but it's important to remember that, in Kevin’s words, “launching a token requires a mature approach in terms of fully delivering all of these programs.
How to navigate all stages of token launch
Kevin’s firm typically starts advising projects and protocols prior to token launch, since that’s usually “the ideal time to make the right decisions on setups and allocations.”
But the launch moment itself is also key: “You need to arrange listings, manage liquidity programs/partners (like market makers), and ensure you have a marketing/comms strategy in place that mitigates risk, risk-management driven perspectives.”
Post-launch, he typically supports projects in a “board role,” since “projects and teams have typically reached a point where they clearly understand the roles they need.”
Importantly, Kevin emphasizes “war-gaming setups” when he works with clients—think through everything that might happen at every stage of launch, then plan out strategies for if/when things don’t go as planned.
Navigating the biggest pre-launch challenges
The biggest challenge in the pre-launch phase: “hype without substance.”
Oftentimes, the prevailing sentiment is that the largest challenges come from the protocol side: teams “work relentlessly to prepare for launch, set up validators, and bring people into the network.”
But often the biggest unmet challenge is remembering that:
“You’re eventually also building something for an end-user. Don’t fall victim to the trap of focusing on the hype, or on optimizing for price development in the beginning. What actually brings sustainable success is building something that an end user actually uses.”
This mistake often occurs because early-stage web3 companies (just by nature) attract technical operators focused on scaling the protocol, or on diving deep into other technical work. Oftentimes, there’s “maybe one commercial person, but they’re halfway absorbed with running operations, so they don’t have time for sufficient BD or market research.”
This is an area, he went on, “where I’d love to see more quality work happening. It might not be a top priority in the early days, but you need to know where you’re moving, long-term, from a product perspective—and why.”
Qualities of a successful web3 founder and finance leader
For founders, Kevin's advice centers around “finding a mentor you can trust, and who you can build a great relationship with.
It’s important to have that outside perspective consistently walk you through your roadmap, your priorities, and ensure you're on track. Being in a project—I know it, because I’ve lived it—can be a rabbit hole.”
That outside presence is someone “who can challenge you and hold you accountable.”
For web3 finance leaders:
- “Get product-centric early on.”
- Stay in tune with regulatory trends
- Think—and act—like a generalist
It’s easy, he explained, for finance leaders to “get lost in the finance” and not understand “what exactly your protocol does, how it interacts with other projects, what transactions it generates, and so on.”
Stay curious, and “make it a point to understand what different protocols actually do. For example: if you're really into DeFi, study those flows and understand how they work, how legal titles are passed, where and when fees are generated, how they’re paid and settled.”
All of this, Kevin emphasized, is “incredibly important for success in your finance role.”
He also emphasized the importance of “staying in tune with what happens on the regulatory front. For instance, in Europe, MiCA (Markets in Crypto-Assets Regulation) is a game-changer, and it’ll leave its mark on how projects launch in the future.”
It’s an exciting time, in terms of regulation, “but you, as a finance leader, need to understand what’s happening, even as you seek outside counsel. Add value to your org by staying on top of regulations happening around the world, and on what they mean for your business.”
Ultimately, successful crypto CFOs “act like strong generalists. You’re forced to think about things from multiple angles, constantly: What does this mean from a legal perspective? A regulatory perspective? What jurisdictions should we look into? ”The best also “need to understand product and marketing functions—it’s all interconnected.”
We so appreciate featuring Kevin in our web3 leadership series, and we’re excited about the advisory work he’s doing for web3 companies.
To learn more about Kevin's firm, connect with him on LinkedIn, or shoot him an email at kevin@threek.xyz.
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