Crypto startups will most likely depend on Venture Capital firms to help them get off the ground. The real question is, are VCs in it for the community and fundamentals, or for their own benefit? (Via CointelegraphZN)
As liquidity is a key aspect of crypto investing, exit time preferences constantly vary compared to traditional VC investments. Liquidity refers to the ease with which an asset or security can be converted into cash at market price.VCs often buy a huge chunk of tokens at an early stage at a very low price, and these tokens are often time-locked, so they can’t be sold for one or two years.
“I wish they could rank VC firms by whether they engaged in quick flips — so founders are aware if they are really dealing with a VC or more of a hedge fund.” VCs may face conflicts between their own cash position and helping an invested company. Web3 lock-ups of a year or so, for example, are famously shorter than in the traditional VC realm, of, say, seven years.Staking may attract VC funding away from riskier seed VC plays. Staking a retail investment once a token lists on a retail exchange can provide better cash returns than a “cheap” seed deal pre-token launch, locked up for 12 months, that tanks when it lists as a token.
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