Market
What Stages Should Crypto Startups Approach VCs for Fundraising?
For any cryptocurrency startup, deciding when to approach venture capitalists (VCs) is a crucial problem. The best time to look for outside funding varies greatly, depending on the particular requirements of the project and the interests of the venture capitalists (VCs) involved.
The investment thresholds of various VCs vary. While some investors are satisfied with the founding team’s strength and the idea alone, others look for concrete results like a Minimum Viable Product (MVP) or obvious market traction. All agree that raising money should never be seen as the final goal. Instead, it’s a strategic tool that must align with a startup’s growth trajectory.
“Founders shouldn’t feel pressured to chase VC funding unless it aligns with their growth strategy. The goal should be building sustainable businesses with healthy revenue streams, not just fundraising for the sake of it,” Leonarda Rajeckyte from The VC Whisperer states.
With this principle in mind, we’ve gathered insights from experts at Axia8 Ventures, Bing Ventures, Capitable Group, Outlier Ventures, and The VC Whisperer to shed light on the right stages for crypto startups to approach VCs.
Pre-Seed Stage: Building a Vision and Team
For some VCs, investing begins even before an MVP exists. Axia8 Ventures, led by Wayne Lin, focuses on the very early stages of a startup’s journey. For them, the most important criterion is not necessarily the technical advancement of the project but the strength of the founder’s vision and adaptability.
“We invest at the truly early stage, often before a deck or product is even developed. The critical factor for us is the founder’s vision, passion, and capability to pivot through multiple iterations. We’ve worked with founders who failed twice but succeeded on their third try,” As Wayne Lin explains.
This approach highlights the importance of having a strong, committed team with the ability to persevere and pivot through failures.
Seed Stage: Concept Validation with Whitepaper and Deck
As a project progresses from ideation to conceptualization, having a well-crafted whitepaper and a solid deck becomes crucial. According to Bruce Lan from Bing Ventures, the whitepaper plays a pivotal role in bridging the gap between an idea and its execution.
“In the early stages, a well-crafted whitepaper or deck can bridge the gap between an idea and execution. It’s essential for teams to communicate a clear vision and path forward. VCs are more likely to engage when they see that the project is grounded in a solid, thoughtful concept, even if it’s still in its infancy.”
This is particularly important for startups looking to raise funds at the seed stage, where they may not yet have a fully functional MVP but can present a compelling argument for the viability of their idea.
A whitepaper can serve as an essential document that articulates the project’s vision, technology, and potential market impact. It gives VCs a clear roadmap of where the project is headed and how it plans to get there.
MVP Stage: Gaining Credibility and Minimizing Risk
As a project advances past the ideation stage, having a Minimum Viable Product (MVP) becomes a critical factor in demonstrating both credibility and progress to VCs. Matthew Tang from Capitable Group emphasizes the importance of an MVP in instilling confidence in investors.
“A working MVP demonstrates progress and eliminates any suspicion of vaporware or scams. At this stage, VCs are more confident in the team’s ability to build and deliver,” says Tang.
For many VCs, especially those who enter the later stages of seed funding, having an MVP is a concrete indicator that the project has moved beyond the theoretical phase and into practical application. The presence of a functioning MVP also provides investors with an opportunity to evaluate the product’s technical feasibility and potential market fit.
Scaling Stage: Approaching VCs for Growth Capital
A cryptocurrency project should look for venture funding to support its next stage of growth once it has begun to attract users and has demonstrated its product-market fit. When a startup is prepared to grow into new markets, accelerate product development, or scale operations, Pietro Negri of Outlier Ventures suggests that they approach venture capitalists.
“When a crypto project needs funding to take its ventures to the next level, it should approach venture capitalists. VCs look for indications of strong product-market fit and growth potential at this stage, whether it’s expanding the product or entering a new market,” says Negri.
Venture capitalists are currently searching for projects that have already demonstrated their concept and now need funding to grow. They will evaluate important measures of product-market fit, like revenue generation, user adoption, and the project’s capacity to draw in partnerships.
Key Criteria VCs Look for in Crypto Startups
Several universal factors help VCs evaluate the potential of crypto startups, regardless of the stage. These criteria include:
- Founding team
- Technological innovation
- Market potential and capacity for problem-solving
- Strategic partnerships
For a deeper look into each of these criteria and insights from experts like Wayne Lin (Axia8 Ventures), Bruce Lan (Bing Ventures), and Pietro Negri (Outlier Ventures), refer to our article on Key Criteria VCs Prioritize When Assessing a Crypto Project.
Common Pitfalls to Avoid When Seeking VC Funding
Even though raising money can be exciting, a lot of cryptocurrency startups risk failing because they make simple mistakes that could have a negative impact on their chances of success. Red flags are easily spotted by VCs, and a startup’s attractiveness can be greatly increased by avoiding these pitfalls.
- Unclear vision and goals: Uncertain vision and goals: One of the most frequent errors is to propose an extremely ambitious or vague vision without providing a clear plan for how to get there. Startups need to be able to clearly explain both their long-term objectives and the precise actions they plan to take to get there. “Investors need to see a well-defined plan that demonstrates how the project intends to grow and scale,” says Leonarda Rajeckyte of The VC Whisperer.
- Incomplete tokenomics: Many crypto projects fail to adequately design a sustainable and transparent tokenomics model. VCs are particularly cautious of projects where the token’s utility and value growth are unclear or poorly thought out. A solid tokenomics model should outline how the token functions within the ecosystem and its long-term value potential.
- Lack of compliance: Legal and regulatory issues are often overlooked in the rush to launch, which can be disastrous in the long run. Failing to consider compliance can turn VCs away and also lead to legal complications down the line. Bruce Lan from Bing Ventures stresses, “Compliance is crucial. Crypto projects need to be mindful of regulations, especially if they plan to expand internationally.”
Final Thoughts: Aligning Funding with Growth Strategy
Raising venture capital is a critical step for many crypto startups, but it must align with the startup’s growth trajectory. As emphasized by experts from Axia8 Ventures, Bing Ventures, Capitable Group, Outlier Ventures, and The VC Whisperer, there is no one-size-fits-all approach to securing VC funding.
The decision to approach VCs should be driven by the project’s readiness, market fit, and clear long-term strategy. Startups should not view fundraising as an achievement in itself but as a means to support sustainable growth. Leonarda Rajeckyte from The VC Whisperer wisely advises that startups should pursue funding only when it enhances their business strategy.
Timing is essential. VCs are more likely to invest when there is demonstrable progress—whether it’s a strong team, an MVP, or early market traction. Ultimately, the goal should be to use funding as a tool to scale, without losing focus on the project’s core mission and vision. Clear objectives and a solid growth strategy will always attract the right investors at the right time.
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Market
Aptos Partners with Circle and Stripe to Revitalize Network
The Aptos Foundation announced a new partnership with Circle and Stripe, hoping to revolutionize its network functionality. Circle’s CCTP and USDC stablecoin will enhance blockchain interoperability, while Stripe will attract TradFi by simplifying fiat interactions.
Aptos has set ambitious goals with this partnership, but APT’s upward momentum has stagnated.
Aptos Partners with Circle and Stripe
According to a new announcement from the Aptos (APT) Foundation, its network is integrating Circle’s USDC stablecoin and Cross-Chain Transfer Protocol (CCTP). Additionally, Aptos is integrating the payment platform Stripe, generally streamlining fiat-related features. These include on- and off-ramps, payment processing, and TradFi ease of adoption.
“Once the integration is complete, users will be able to seamlessly transfer USDC between Aptos and 8 major blockchains. In addition to USDC and CCTP, Stripe will soon launch its payment services on Aptos, creating a reliable fiat on-ramp to streamline merchant pay-ins and payouts using Aptos-compatible wallets,” the firm claimed via press release.
In other words, Aptos aims to use this partnership to make itself “the ultimate hub for interoperable DeFi.” These companies will approach this goal from both ends: enticing new users and investors while substantially improving the core experience. This partnership marks a new development for Stripe’s integration with crypto.
Indeed, Stripe took a six-year hiatus from cryptocurrency payments, which only ended this April. Since then, however, it’s been engaging seriously with the industry. The firm entered an earlier partnership with Circle this June, hoping to promote USDC adoption. Additionally, Stripe acquired Bridge, a crypto payment platform, last month.
For its part, Aptos is undertaking a recovery process. Despite a major price spike in March, it suffered a lingering decline for most of 2024. The asset began regaining steam in October, and the November bull market has brought increased optimism. Still, its gains have stagnated for about a week.
This partnership between Aptos, Circle, and Stripe may help APT regain its forward momentum. These ambitious new features will greatly add functionality and accessibility to Aptos’ network. Still, the firm has set a very ambitious goal for itself: to solidify “its place as a leader in interoperable DeFi and enterprise-grade blockchain technology.” Only time can tell its success level.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
SEC Moves Toward Solana ETF Approval Amid Pro-Crypto Shift
The SEC is quietly meeting with several issuers to discuss approving a Solana ETF, claims Fox Business reporter Eleanor Terrett. With Trump’s impending pro-crypto administration, the SEC seems more inclined to approve such a product.
However, anti-crypto figure Gary Gensler is still nominally in charge of the SEC, and public progress might not begin until 2025.
Solana ETF Approval Is Getting Closer
According to a scoop from Fox Business reporter Eleanor Terrett, the SEC and several ETF issuers are in talks to approve a Solana ETF. Currently, Brazil is the only country that has given this product a green light. As recently as September, Polymarket odds gave the SEC a dismal 3% chance of approving it. This reluctance, however, might soon be changing:
“Talks between SEC staff and issuers looking to launch a Solana spot ETF are “progressing” with the SEC now engaging on S-1 applications. Recent engagement from staff, coupled with the incoming pro-crypto administration, is sparking a renewed sense of optimism that a Solana ETF could be approved sometime in 2025,” Terrett claimed.
Terrett was very clear about the impetus for this progress in negotiations: Donald Trump’s re-election. On the campaign trail, Trump vowed to significantly reform US crypto policy, and one cornerstone was firing anti-crypto SEC Chair Gary Gensler. Gensler has apparently conceded to his impending ouster, and his replacement will undoubtedly support the industry.
Previous attempts have floundered at an early step in the process. Once the SEC officially acknowledges an application, it must confirm or deny it within a 240-day window. Previous filings have lingered in limbo at this stage. However, the list of candidates is now growing: Canary Capital filed for a Solana ETF in October, and BitWise did the same earlier today.
Nonetheless, these positive negotiations still only consist of anonymous rumors. The Commission has not publicly moved to begin this process, and Gensler is still nominally in charge. Terrett posits that the SEC will only make serious progress on the Solana ETF at the start of 2025. Compared to previous pessimism, however, this is a complete sea change.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
ETH/BTC Ratio Plummets to 42-Month Low Amid Bitcoin Surge
The ETH/BTC ratio, a metric measuring Ethereum’s price performance compared to Bitcoin, has reached its lowest point since March 2021. This development comes amid BTC’s brief rise to $98,000.
While the flagship cryptocurrency has increased by 7.45% in the last seven days, ETH has hovered around the same region, with investors raising concerns about the altcoin’s future.
Ethereum Continues to Lag Behind Bitcoin
In February, the ETH/BTC ratio climbed to a yearly high of 0.060. During that time, speculation spread that Ethereum’s price would begin to outperform Bitcoin and validate the altcoin season. However, that has not happened, as Bitcoin’s price has continued to make new highs
Ethereum, on the other hand, is yet to retest to reclaim its all-time high despite reaching $4,000 earlier in the year. This disparity in performance could be linked to several factors. For instance, both cryptocurrencies saw approval for exchange-traded funds (ETFs) this year.
However, while Bitcoin has seen billions of dollars in inflows, ETH has been inconsistent in attracting capital. Hence, the institutional inflow has driven BTC toward $100,000, ensuring that the ETH/BTC ratio drops to $0.033 — the lowest level in 42 months.
Further, the disparity in Ethereum’s performance can largely be attributed to sustained selling pressure. For instance, CryptoQuant data reveals that exchange inflows into the top 10 exchanges have climbed to 461,901 ETH, valued at approximately $1.50 billion as of this writing.
This surge in exchange inflow reflects large deposits by investors, indicating a heightened willingness to sell. Such movements typically increase the supply of ETH on exchanges, raising the likelihood of a price drop.
In contrast, a low exchange inflow generally indicates that investors are holding onto their assets, which is not the current scenario for ETH.
ETH Price Prediction: Crypto Could Retrace
As of this writing, ETH trades at $3,317, which is a higher close than yesterday’s. Despite that, the altcoin is still below the Parabolic Stop And Reverse (SAR) indicator. The Parabolic SAR generates a series of dots that track the price movement, positioning above the price during a downtrend and below the price during an uptrend.
A “flip” in the dots — shifting from one side to the other — often signals a potential trend reversal. As seen below, the indicator is above ETH’s price, suggesting that the cryptocurrency could reverse its recent gains.
If this is the case and the ETH/BTC ratio declines, Ethereum’s price could decline to $3,083. However, if buying pressure increases, that might not happen. Instead, the value could surge above $3,500 and toward 4,000.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
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