Crypto VC deployment still slow as investors wait for even lower valuations • ZebethMedia
Ongoing volatility in the crypto markets is leading to mismatched conversations between venture capitalists and founders — and entrepreneurs aren’t often finding themselves on the winning side.
While some crypto-native and general funds are actively deploying capital into the digital asset world, others are taking a slower approach. Over the summer, some market participants anticipated deals would ramp back up in September, but that still seems to be on hold as we move into mid-October and crypto market conditions remain shaky.
“A lot of VCs paused deployment over the summer and there’s a record amount of cash right now sitting on the sidelines; that’s not just specific to crypto,” Alex Marinier, founder and general partner of fintech and blockchain-centered firm New Form Capital, said to ZebethMedia. “My sentiment is that the pervasive feeling in crypto right now is fear.”
However, Marinier said that the more bearish climate is an attractive time to keep investing, adding that “now is the time to be allocating.”
“My sentiment is that the pervasive feeling in crypto right now is fear.” New Form Capital founder Alex Marinier
New Form has allocated about 30% of its $75 million Fund 2 to date, Marinier shared. The majority of New Form’s deals for its second fund have been in its target “sweet spot” of crypto startups valued in the range of $15 million to $35 million.
But not every fund is going full steam ahead.
“Many of us were expecting September to be a gangbuster type of moment where sentiment would be fully back and the events that happened with LUNA, Celsius and BlockFi would have been moved on from,” David Nage, venture capital portfolio manager at the crypto-focused firm Arca, said to ZebethMedia. “But what you’re seeing with these events, while they’re in the past, they still come back to bite us in the proverbial ass.”
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