Revaz (Rezo) Shmertz, co-founder and managing partner of BR Capital, said that the digital asset investment firm has reduced its venture capital investments in recent years, focusing more on liquidity strategies and active trading, without abandoning its venture capital business.
Shmertz is also the founder of Beyond Research Labs (BR Labs), which focuses on market infrastructure and execution.
In this interview, he reflects on how BR Capital’s priorities have evolved, why liquidity markets have gained greater importance in the business, and what this shift means when research, engineering, and trading converge in real markets.
He stated that BR Capital has, since its inception, engaged in venture capital, liquid asset management, and active trading. Over the past few years, the company has reduced its venture capital activities and placed greater emphasis on liquidity strategies.
“We didn’t decide to switch business models at a single meeting,” said Shmertz. “This shift evolved gradually and became clearer in the second half of 2025.”
The liquidity strategy he mentioned refers to actively managing positions traded on the market.
“For me, the appeal lies in the work itself,” he said. “Liquidity strategies bring mathematics and infrastructure into direct contact with the market, where assumptions are tested. It can be painful, but it makes the work dynamic—and perfect for me.”
Shmertz said the company still maintains its venture capital mission, but has shifted more focus toward liquidity strategies because they better align with the team’s strengths.
Assume it is tested in the market
When asked about the fundamental differences between venture capital and live trading, Shmertz said that these two environments test investment judgment in very different ways.
In early-stage venture capital, the investment thesis centered on a team and an unformed market. Investors made the decision, and then the company executed. Years later, the company may or may not have succeeded; even in hindsight, it’s difficult to fully distinguish the quality of the initial analysis from what ultimately unfolded.
“That’s the nature of this asset, which is why venture capitalists reward patience more than precision,” he said.
When discussing liquid markets, he said the answer comes much faster.
A liquidity strategy begins with an assumption about how the market works. This assumption must be precisely documented as rules; the rules must be turned into code; and the code must be executed against real order books at the scale at which we intend to trade. At every step, the idea may be proven wrong: the mathematics may be sound, but the infrastructure may fail; the infrastructure may work, but the market may simply not behave as the model assumes. The market is the final reviewer—and it doesn’t argue; it only returns a number.
When asked whether this meant the work was more demanding because there was no place for weak assumptions to hide, Shmertz said that was precisely what made the work appealing to him.
Research, engineering, and marketing are not separate activities or simple handoffs—they form a real-time system, and those who build it are responsible for the entire pipeline. When a strategy underperforms, the cause lies somewhere within this pipeline: perhaps the assumptions are flawed, the model fails to account for a certain cost, the data lacks a specific market condition, or it doesn’t respond to it. The answer is often uncomfortable, but it is specific and directly informs the next iteration of assumptions.
In response to the question of whether getting clearer answers from the market makes the job easier, he said it does not.
This won’t make the job easier than venture capital—it will only make it more exposed. Venture capital logic can be sustained by belief for a long time, but trading assumptions cannot; they are either validated by the market or they aren’t, and the trading desk must be prepared for both outcomes.
Build your business within capacity limits
Shmertz said that people often assume that if a strategy works, the next obvious step is to increase capital investment, but this logic doesn’t hold in trading.
The best-performing trading strategies in history share a common drawback: they are not scalable. Funds running these strategies often struggle to attract external capital; some have remained closed to outside investors for decades. Those that do accept capital or increase capacity typically impose long lock-up periods and strict size limits—not to create exclusivity, but because the strategy ceases to be effective once capital exceeds a certain threshold.
What actually happens when the strategy reaches this upper limit?
This is what capacity means in practice. A strategy has an optimal size at which it achieves its expected returns, and another size at which its own trading begins to push the market against itself. Just because an asset has a quote does not mean you can enter or exit a sufficiently large position at that price; once you exceed the quantity available at the best tier, executing the trade means chasing the price up the order book, and this cost erodes the edge the strategy aims to capture. Calling a market “liquid” does not eliminate this constraint—it merely shifts where the constraint appears.
He stated that capacity, not ideas, is the primary constraint in a successful trading business. “Ideas are always available, but the space to deploy them at sufficient scale is scarce—and that’s where we see the opportunity.”
When asked how to create more room for capital deployment without diluting the strategy if capacity is the real constraint, Shmertz noted that BR Capital and BR Labs have long been active in three markets that many participants view as separate: traditional finance, centralized crypto exchanges, and decentralized protocols.
Each market has its own microstructure, sources of liquidity, and inefficiencies. A team that understands only one market is limited to the capacity that market can provide. In contrast, a team that can switch between these markets, price the same risk across centralized platforms and DeFi protocols, and understand the differences in underlying infrastructure and how they connect, can apply the same hypothesis across a much broader landscape.
When asked about BR Capital’s strongest advantage today, he said this is precisely where the company’s capabilities align best: not in a single strategy that can be infinitely scaled—because no such strategy exists—but in connecting trading venues that others see as separate and building the infrastructure needed for cross-market execution.
This is first and foremost a research and engineering problem, and only then an asset allocation issue—and that’s precisely the area of the business I want to focus on.
From investment agreement to participation agreement
When discussing practical implementation, Shmertz noted that BR Capital’s support for CoW Swap is an example of where investment and operational efforts intersect. Through BR Labs, his independent research and engineering firm, the team also participates in the CoW Protocol via its own solver, BRRRolver.
For those unfamiliar with DeFi, a solver is a professional actor tasked with competitively executing users' trade orders. Users specify acceptable outcomes, and the solver determines how to achieve them. The CoW Protocol’s smart contract enforces the constraints signed by users, including applicable price and quantity limits.
When asked what he learned by actively participating in the protocol’s internal operations rather than just as an investor, Shmertz said that, in addition to supporting the protocol, the team is now also doing execution work within the protocol itself.
This reflects the role of the investor-builder: evaluating financial systems while building the software that participates in them.
Where is BR Capital headed next?
When discussing BR Capital’s future, Shmertz said that the liquidity strategy is the company’s next step.
This isn't about adding a hedge line alongside our venture capital business—it's the direction we're heading in, and our research, engineering, and capital will all reflect this.
He said that venture capital has been part of the company’s journey to where it is today, enabling it to engage over the years with the protocols and teams underlying today’s liquidity strategies; meanwhile, his own decade of experience in this market has helped the company more easily identify connections between markets that others view as separate.
If a future opportunity arises where supporting a protocol and building within that protocol are one and the same decision—like CoW—we will seize it. But we’re not looking for the next venture portfolio; we’re building a trading business.
This is much harder than simply allocating capital and waiting, but it’s also the work we believe is truly worth doing.