The renowned blockchain entrepreneur and investor summarizes his thoughts on the incentives for capital formation in cryptocurrencies, the natural rivalry between venture capitalists and retail investors, the permanent indicators for seed round participants, and the difficult times for the fundraising in the early stages.
The renowned blockchain entrepreneur and investor summarizes his thoughts on the incentives for capital formation in cryptocurrencies, the natural rivalry between venture capitalists and retail investors, the permanent indicators for seed round participants, and the difficult times for the fundraising in the early stages.
Teams are limited by dominant meta, admits Kain Warwick
In 2024, even the most successful Web 3.0 teams looking for fresh funds will be limited by the current meta if they want to generate big rounds, Warwick shared in his latest thread on X with 123,000 followers.
From the seed investor’s point of view, the signs of project traction (in terms of user base, potential customers, airdrop farmers) remain unchanged: venture capitalists look for products with growing TVL, a large number of X and Telegram followers, etc.
That said, investors still use these primitive indicators of social engagement to estimate the potential number of retail token buyers.
As such, the introduction of points, pioneered by Blast, an overrated OP Stack L2, became the natural way for teams to prepare for fundraising:
So when the point meta comes up, everyone has to do it. Because the competition in the early stages is intense. If you can incentivize activity and TVL at zero cost, you can generate larger rounds.
Seed rounds completed for between $10 million and $50 million in FDV are “pure solution” for investors, and almost all of them turn a profit at the end of the day, Warwick admitted.
Crypto Fundraising 101 by Synthetix Founder
Personally, he recommends revealing a retail token with a valuation of between $10 million and $1 billion after three rounds of private/seed funding with venture capitalists:
Breaking the current anti-retail meta requires facing the wrath of venture capitalists and regulators. No first-time founder will do this. The incentives are too strong. Do a low float token launch after 1-3 private rounds and have a paper net worth of 8-9 or even 10 figs. Or try changing the meta and getting rekt most likely
Additionally, he admitted the role of retroactive 2021-2023 airdrops as a way to introduce tokens to a large percentage of retail owners.
As Guru-Investingpreviously reported, Warwick pegged the meme coin euphoria as a natural catalyst for Ethereum’s L2 adoption.
