List of legit VCs in crypto
This whole space is like 95% scammers, clueless idiots, and ideologues.
Besides Paradigm and Sequoia what's the list of VCs that actually have a strategy and can back it up with research, operational, and deal flow capabilities?
From a start up perspective: In my experience, sector-native funds or those with strong dedicated crypto teams are far and away the most useful from a strategy and ops support POV. This obviously makes sense given the somewhat unique asks that crypto startups tend to have, from tokenomics to ecosystem integrations. Unsurprisingly, exchange-backed VCs such as Binance Labs, FTX Ventures, etc have a sizable advantage when it comes to these aspects. Getting one of these on a cap table early — even for a small check size — can be a game changer when it comes to future funding rounds and eventual listings and partnerships.
Likewise, ecosystem funds (depending on what you’re building) are great as well. Most big L2s and a variety of other chains will have their own funds and many will actually do grants in exchange for integrating their chain into your product offering. Very helpful for seed stage companies.
For both of these avenues, it’s important to cultivate relationships early and consciously maintain them. Exchange backed funds often back dozens (hundreds tbh) of seed stage start ups at a time. No optimal, but if they see persistent contact and real output from a PortCo, they can be instrumental in growth.
Definitely a number of other funds that are worthwhile as well. CoinFund comes to mind as an early and entrenched player in the space with the connections and operational advisory capacity to match. If it’s helpful, I can maybe put out a (definitely non-exhaustive) list of these “non-affiliated” VCs that are actually worth engaging with.
Thank you so much. I'd love to get that list. What would you say is the best approach to reach out and engage with them?
To reply to your thoughts:
My original thought was, if possible, getting a smart crypto native fund & proven funds with operational excellence outside of crypto would be the best choice. As my idea would generalize really well outside of just the crypto world & would eventually be a regular business with crypto elements.
Non crypto-native but operationally excellent fund I thought would help me avoid a possible groupthink that seems prevalent in the crypto world as well as cover grounds that maybe crypto native funds can't cover (ie. Culture, finances, regulatory concerns, etc...).
Sorry for the verbosity. Clearly I have lots of questions.
Agree with all the above. The one point I'd add is, I'd be wary of any fund that is either a generalist or a Fintech fund that doesn't have any deep crypto expertise. Frankly, those funds seem to be the worst to work with as they really don't understand crypto and the ecosystem and will likely 1. Not invest in many businesses 2. If they do invest, will be mostly useless in terms of actually being able to provide any meaningful advice.
You're best of with crypto native funds, Dragonfly, Multicoin, Paradigm or exchange related funds. I'd honestly be even a little wary of the big VCs. A16z has a lot of money and they're making quite a splash, but I don't necessarily think of them as the smartest investors in the space. Same goes for Sequoia. At any of these large multi-strategy funds, the ultimate point of the fund strategy is to take in as much money as possible, so of course they're going to try and proclaim expertise and take in LP money. As with many good PE/VC funds, the best ones generally start small within a niche and build out from there. If you're looking to be a crypto/web3 expert, look for expert investors in the space rather than trained generalists.
Thank you!
As in above, curious to hear what you think about the risk of groupthink contamination that could happen as a result of going with crypto natives.
My "plan" (if I can pull it off) is to get both crypto natives and really strong traditional fund with very strong operational capabilities (to help with culture, finance, org structure & company design) on the cap table.
+1 SB to this especially talking about the crypto-native funds (this poster also listed a few solid ones). I am currently on the trading side of things at an ecosystem partner - GSR/Wintermute/Jump Crypto but I coordinate with our BD/VC guys quite a lot and you can tell the difference very quickly from a traditional guy who took 10 YoE showing up to meetings in suits with fundamental valuation knowledge from a big bank and the difference between a guy who has 5 YoE building DeFi protocols, worshipping the BTC whitepaper, publishing research on ZK rollups/scaling solutions etc.
Stick with the guys who are the true experts in the space and quite frankly a lot of the traditional funds are not the smartest guys in the space and I'd feel a lot more comfortable at one the funds listed. Additionally, a lot of the trading firms all have VC arms and a hell of a lot of quantitative/dev firepower there so you see some of them participating in large funding raises as well. I.e. Wintermute, Alameda, GSR, Jump.
Ut est esse quae maxime ullam quidem accusamus. Inventore distinctio ea minus omnis.
Fugiat in et est et aliquid ea. Deleniti id rerum architecto et expedita.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...