Empire Newsletter Segment

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After watching hours of DAS panels featuring institutions bullish on crypto, I have one thought: VC isn’t dead.

I’m somewhat joking, but I believe there are strong takeaways about the current state of venture capital in crypto, and they didn’t all come from the venture capitalists themselves!

Take, for example, the Empire round-up filmed live on stage featuring Avara’s Stani Kulechov, Skale’s Jack O’Holleran, Santiago Santos, and Jason Yanowitz. One topic they discussed was the size of raises today, with Yanowitz asking whether mega-raises — or funding rounds over $150 million — are here to stay (at 1:39:00).

O’Holleran stated that huge funding rounds “paint yourself into a corner.” He explained that it’s counterintuitive to think, ‘Oh, give me all the cash and more ownership,’ but the reality is that a lot depends on valuation. If you start high and then drop, “that’s not a good look,” he noted, emphasizing the negative impact on decentralized community efforts.

O’Holleran expressed that he becomes “a little bit pessimistic” when mega raises occur, which is why, in my role in the space, I prefer covering smaller raises. I believe smaller raises offer a genuine insight into what firms are attempting to build. O’Holleran suggested that the “right amount” for larger raises would be around $50 million, providing enough cushion without overwhelming amounts that might not be well utilized.

Kulechov agreed, highlighting the importance of resources.

The second takeaway comes from a different panel: Do VCs still matter? Blockworks Research analyst Boccaccio was joined by Dragonfly’s Haseeb Qureshi and 6MV’s Mike Dudas, who defended the role of venture capital.

(Qureshi’s chemistry with Dudas was noteworthy and amusing.) Qureshi quickly addressed the panel’s main question, asserting “I’m a VC…I still matter.” He later pointed out that VCs act as a valuable resource for the firms they invest in, a fact sometimes overlooked in critiques of venture capital.

This sounds supportive of VCs, and I recognize the numerous reasons to remain cautious about their influence and to assess their active contributions to the industry. This newsletter does not seek to give them a hall pass, just to clarify.

The discussion also highlighted that, particularly in crypto, individuals who invest early in a token or closely follow a project often expect price increases without understanding that projects are addressing more than just price action.