follow us on twitter . like us on facebook . follow us on instagram . subscribe to our youtube channel . announcements on telegram channel . ask urgent question ONLY . Subscribe to our reddit . Altcoins Talks Shop Shop


This is an Ad. Advertised sites are not endorsement by our Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise Here

Author Topic: Crypto VC Funding Deals are Falling Apart Due to Bear Market Bad Time For Starup  (Read 1006 times)

Offline sirty143

  • Mythical
  • *
  • *
  • *
  • Activity: 8772
  • points:
    321615
  • Karma: 306
  • Trade Count: (0)
  • Referrals: 19
  • Last Active: September 10, 2024, 09:39:26 AM
    • View Profile

  • Total Badges: 28
    Badges: (View All)
    Sixth year Anniversary Fifth year Anniversary Fourth year Anniversary
According to Barry Silbert, the founder and CEO of Digital Currency Group (DCG), many venture capital funding deals in the crypto sector have fallen apart in the past few months as a result of the 12-month bear market.

Silbert, who oversees the operations of one of the largest venture capital firms in crypto with investments in Coinbase, bitFlyer, Blockchain, Chainalysis, Coins, ErisX, Etherscan, Kraken, Ledger, Ripple, and many more large-scale companies in the cryptocurrency space, said:

“We’ve seen half a dozen fundraising deals fall apart over the past month after the lead pulled out. All is not well in crypto VC investor land Good time to remind founders that a signed term sheet does not equal cash in the bank.”

Difficult Period For Crypto Companies

The bear and bull market cycle works the same way for venture capital firms as retail or individual investors. As ShapeShift CEO Erik Voorhees explained, venture capital firms tend to move out of a market when it struggles and comes back when it’s flooding with investments, demand, media coverage, and user activity.

Some venture capital firms, like Andreessen Horowitz, have stayed true to their vision and continued to lead investments during a market downtrend. However, the majority of venture capital firms habitually headed to the exits once the industry started to dwindle.

“The VCs disappear when markets are down, and flood back in when markets are up. Are they not supposed to be the smart money? Their investing instincts seem little better than the Coors drinkin’ taxi driver all excited about Tron three weeks before the bubble pops,” Voorhees said.

In the past two to three months, some firms have made several high profile multi-million dollar investments in crypto startups that are strengthening the infrastructure around Bitcoin.

Nasdaq and Fidelity, for instance, engaged in a $27.5 million funding round to finance ErisX, a cryptocurrency exchange and a strictly regulated futures market based in the U.S.

At the time, ErisX CEO Thomas Chippas said that the support from leading financial institutions is monumental for the long-term growth of the startup:

“With increasing financial support from leading edge firms, ErisX stands to provide the most robust, secure and regulated digital asset offering available to both institutional and individual participants. Closing this second round of funding enables us to continue building our modern platform and expand our team.”

Build it While its Down

In the upcoming months, the crypto sector could continue to see a handful of venture capital firms and financial institutions finance the strengthening of the infrastructure surrounding the asset class while the vast majority of venture capital firms hold out on any additional investment.

After all, cryptocurrencies represent a market that is smaller than the market cap of major banks like JPMorgan. But, especially for venture capital firms whose role is to initiate high-risk, high-return investments in emerging or developing markets, the time to invest is when the market is demonstrating signs of recovery after a large downtrend when the valuation of companies and projects massively drop.

However, while the cryptocurrency bear market has taken a toll on all participants in the sector, reports show that the investment of venture capital firms in early-stage companies has noticeably slowed down throughout the past year, which suggest that the drop in crypto investments may correlate with a change in the global venture capital trend.


Source:  CNN

Altcoins Talks - Cryptocurrency Forum


This is an Ad. Advertised sites are not endorsement by our Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise Here


Offline simplex

  • Plagiarism strike
  • Member
  • *
  • Activity: 135
  • points:
    198
  • Karma: -48
  • The World’s First Blockchain Core
  • Trade Count: (0)
  • Referrals: 0
  • Last Active: December 16, 2018, 01:26:27 AM
    • View Profile

  • Total Badges: 12
    Badges: (View All)
    10 Posts First Post Fifth year Anniversary
Some venture capital firms, like Andreessen Horowitz, have stayed true to their vision and continued to lead investments during a market downtrend. However, the majority of venture capital firms habitually headed to the exits once the industry started to dwindle.
▄▄▄▄▄▄▄▄▄▄▄ ▄ ■        SKYNET        ■ ▄ ▄▄▄▄▄▄▄▄▄▄▄
▐▬▬▬▬▬▬▬▬▬▬     PRIVATE SALE is LIVE     ▬▬▬▬▬▬▬▬▬▬▌
Whitepaper   Bounty   Bitcointalk   ■   Facebook   Twitter   Telegram

 

ETH & ERC20 Tokens Donations: 0x2143F7146F0AadC0F9d85ea98F23273Da0e002Ab
BNB & BEP20 Tokens Donations: 0xcbDAB774B5659cB905d4db5487F9e2057b96147F
BTC Donations: bc1qjf99wr3dz9jn9fr43q28x0r50zeyxewcq8swng
BTC Tips for Moderators: 1Pz1S3d4Aiq7QE4m3MmuoUPEvKaAYbZRoG
Powered by SMFPacks Social Login Mod