2/ the big firms need to deploy in size - $5M checks and up
a $250M fund could do a $5-10M deal every month for two years and still be under-allocated
and there arenāt enough companies raising series B / C / D rounds!!!
every deal iāve done lately is under $50M valuation
3/ so we see firms competing to take down entire rounds.
a recent series A financing had two firms competing to take down the ENTIRE ROUND, and it eventually got upsized, a LOT.
if a company is putting up user acquisition / growth and a revenue story, itās highly competitive
4/ most projects and coās donāt need money tho - why would a founder take 20-40% dilution when theyāre banking cash and crypto? so they do 5-10%
so the valuations go up, but available allocations go down, resulting in an even bigger squeeze on allocators who *need* to deploy
5/ add in the onslaught of non-crypto M&A thatās coming, which is culling the herd of investable unicorns
add in the wave of SPACs and direct listings taking later stage opportunities out
there just arenāt enough places to put capital in size rn
whatās a fund to do?
6/ seed / series A is ultra competitive - iām trying to deploy as fast as i can across a wide range of coās, because many will not raise again or raise small rounds at crazy valuations
but your pedigree and reputation matter - founders can be choosy since thereās so much $$$
7/ funds are rushing to add platform + services - something i built at
@DCGco and continue to build
@CoinSharesCo - itās a big differentiator!
perks include code audits, marketing, hiring support, research, etc
expect to see this grow exponentially (it already has in trad VC)
8/ companies are becoming more selective in how they raise and have more pools of capital available to them - many rounds now never hit the fundraising trail
and once
@coinbase IPO goes out at $50B+, even more capital is going to come hunting for ROI in crypto
9/ itās a founderās market and thereās TONS of capital chasing too few deals
the crunch is going to get intense
for investors, be careful and DYOR - always down to trade deal notes
for founders, be choosy. raise less. demand more value! your investors work for YOU š¤©
10/ for those thinking about starting a co - if you want to chat, donāt hesitate to reach out! there is a great network of folks who have been funding this industry for years ā¤ļø use them!
we are about to enter a brand new era of crypto VC and i couldnāt be more excited š„š§Øš„
disclosure: our equity investments
@CoinSharesCo can be found at
https://t.co/kHiDYlNRdH my personal portfolio including companies and protocols can be found at
https://t.co/K3fVxXPq0v (overdue for an update tho!)