How VCs Survive in Web3

In 2021, Web 3.0 has caught the public eye and gone dark as NFTs bring millions of new users into the world of distributed applications. And in terms of funding, more crypto-based funds have increased the amount of new capital, and major venture capital and private equity firms like Tiger or Coatue are just starting to expand their digital resources and actively invest. in multiple projects. Web 3.0.

This has two effects. First of all, if Web 3.0 was "available" to VCs, many personalities like Jack Dorsey (co-founder of Twitter) would ask more about the basics of Web 3.0. Meanwhile, the additional competition from venture capitalists can make money to choose the wrong investment strategies to participate in the current competition to get the most out of it, capitalize or get a short profit on the value of the reputation.

Only research-developed VCs that deliver real value to their operations can positively impact current business life. However, there is still skepticism that the Web 3.0 ecosystem still needs financial support from labor organizations. In response, we must first identify the role of venture capitalists and private equity firms in the world of Web 3.0 and the value-added services they provide to decentralized enterprises.

The secret of added value

Lighting Industry - Reputation

Lighting Industry - Reputation

The first steps usually depend on physical investment approval. Business sector VCs have a rigorous process set by default. Their support for this project is often understood as a good signal to economic actors, who are not only consumers, but also entrepreneurs, even exchanges of L1, rules, etc. The crypto industry is looking for suitable jobs. ~

But it will take years of hard work and dedication to build a reputation, and it will require solid data and building community relationships. A new portfolio project can be backed by a venture capitalist reputation, which is one of the most time-consuming undertakings for a venture capitalist. For example, a16z is considered one of the most reputable companies in this field. So, no matter what a16z does after investing, the investment itself has already proven beneficial to the project. Indeed, most industry participants take this as an indication that the project may be very successful. It deserves more attention.

network service

network

VC is a complex industry and, in general, the longer VC has been in the market, the greater its competitive advantage. Build a network of resources including setting up hackathons to support early developers, schedule multiple meetings such as conferences, contact security research companies/financial companies/other VCs in other areas, discussions with the media, etc. have to practice. All in all, this is a consistent release for this network capital.

New ventures often need approval from the same industry, so parties need the services of good VCs. Approved resources use more VC time and energy compared to approved operations, but still complete the metric. In general, venture capitalists seem to aggressively provide more capital than they are simply required to. For VCs, the key to the importance of these investments is the weight of these investments. For example, you can pitch a company for security research, connect with intermediaries, find skills, connect with news outlets, communicate with companies, and more.

experience

experience

Likewise, knowledge is proportional to time. For designers on the project side, this knowledge is useful as it can be helpful in deciding the long-term strategy and direction of business management, especially in the sleepless economy. There seems to be no right or wrong in the nascent market like cryptocurrencies. However, knowledge of VCs can help parties with a more cost-effective plan, be it time/financial or operational.

capital fort

deep pocket

Some laws require large sums of money to support and significant funding to support long-term growth. Because solid capital is essential. Venture capitalists must also create riskier investments to back products and strategies that have not been tested over the long term. High-risk VCs are willing to take the added risk of closing their accounts in an untested smart contract.

Coaching

hands approach

Finally, the most important but hardest service to measure for good VCs is practice. A solution can be defined as a deep industry collaboration, R&D and token design model, in which merchants and employees are involved, respectively, highly involved in the day-to-day operation of the project.

Some examples of VCs having a major impact on businesses through their direct involvement include Paradigm's involvement in the development of Uniswap v3 and the Opyn Squeeth option, or Delphi Digital's involvement in token trading by Axie Infinity . Of course, as you can see, we (IOSG) have many similar practices, and we put a lot of effort into growing the project after the investment.

Given the limitations of time and cost, including the large investment, it is clear that VCs are unprofessional and difficult to do everything alone. However, achieving this common vision and goals is the foundation of a long-term relationship.

The comeback

Support therapy

From a project perspective, it is necessary to determine what type of partner they want. Some jobs are very strong in certain areas (like Industrial Research) but may not be known to others (like Industrial), so you're looking for more VCs. Each project has its own preferences, but you should plan your budget based on those preferences.

For example, if your project is looking for long-term VCs, you should invest enough for the VCs you work with, and not put too many VCs in the environment. Indeed, the most capital-intensive investment at the local level will require more investors, but at the expense of other value-added services.

a lot of money

nce scale

From a VC perspective, reputation can fall into some kind of bad behavior and can be lost due to VC failures. The difference between risk and support a lot of jobs get, but it's not a good idea because it affects the reputation of silver and its ability to compete in the future. . In addition, as additional investments lead to diversification of the capital portfolio of enterprises, the increase in costs is accompanied by an increase in the capital portfolio.

Evaluating and focusing on investors' bets can reveal where the income is coming from in terms of beliefs and assumptions. In our opinion, venture capital plays an important role in the Web 3.0 ecosystem. After all, like any other site, the industry will filter out real VCs from this source, and mining fees will ultimately be excluded from the bottom line.