Deal Room: here’s what top crypto VCs anticipate for 2023
In this venture-focused segment of The Scoop, veteran crypto VCs Meltem Demirors and Vanessa Grellet unpack the trends shaping crypto's venture landscape in 2023.
According to Demirors, crypto companies must follow the flow of funds:
"The name of the game is 'interchange,'" Demirors said. "The closer you migrate to where the actual interchange happens, the more likely you are to earn consistent revenues, which then results in you being able to raise capital."
Although crypto venture funding hit a two-year low last quarter amidst the chaos caused by FTX's collapse, Grellet is seeing "a lot of excitement in the early stage," with infrastructure and scaling plays among the most popular with investors.
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Venture Round with Meltem Demirors and Vanessa Grellet
In this venture capital-focused segment of The Scoop, CoinShare Chief Strategy Officer Meltem Demirors and Aglaé Ventures Managing Partner Vanessa Grellet explain which crypto verticals are oversaturated, and examine how market dynamics have changed since last year.
Although the crypto industry has experienced many boom-and-bust cycles before, Demirors says “2021 will be one of the worst years for crypto venture returns.”
Demirors explains that one of the reasons for this is a mismatch in block space supply and demand that was created during the proliferation of competing Layer 1 blockchains last year:
“We're seeing that now with all of these overfunded L1s — there's just more block space than there is demand for block space.”Instead of mimicking existing successful projects, Grellet suggests that up-and-coming crypto projects should identify how they plan to differentiate themselves early on:
“The question is, if you are a new platform coming into space or a new marketplace, what is distinctive that you bring that will allow for the end user to come to your platform rather than going to the existing incumbents?”
Episode 115 of Season 4 of The Scoop was recorded live with The Block's Frank Chaparro, CoinShares CSO Meltem Demirors, and Aglaé Ventures' Managing Partner Vanessa Grellet.
Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests can be sent to podcast@theblockcrypto.com.
This episode is brought to you by our sponsors Tron, Ledn, Athletic Greens
About Tron
TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized web3 services boasting over 100 million monthly active users. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. | TRONDAO | Twitter | Discord |
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Venture capitalists are shunning tokens, say veteran crypto investors
Last year’s bull market exuberance is a distant memory, as are the wildly inflated crypto funding rounds that attracted an unprecedented amount of venture capital to the space.
In this episode of The Scoop, CoinShare’s Chief Strategy Officer Meltem Demirors and Aglaé Ventures Managing Partner Vanessa Grellet unpack how the crypto VC landscape has changed since last year’s bull market, and particularly why venture capitalists are becoming more reluctant to invest in early token rounds.
As Demirors explains, savvy investors are realizing the token model is not always the best way to capture value:
“There's now consideration of the fact that tokens, in particular governance tokens, are not necessarily the best way to capture value creation… an investor who's willing to write really large checks is going to have some fundamental questions around monetization that doesn't just rely on ‘number-go-up’ tokenomics.”
According to Grellet, regulatory concerns — particularly regarding some token models’ similarity to unregistered securities — are another reason tokens are not as attractive to investors these days.
While hesitancy regarding seed-stage token rounds is becoming more widespread, Grellet believes there is still interest in tokens if they make sense as part of larger equity investments:
“We see a lot of investors being comfortable with both the equity and a token option so that if the main company has one project, but also has several other projects that warrant tokens, then you can have upside in the ongoing life of the company.”
Episode 89 of Season 4 of The Scoop was recorded live with The Block's Frank Chaparro, CoinShares CSO Meltem Demirors, and Aglaé Ventures' Managing Partner Vanessa Grellet.
Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com.
This episode is brought to you by our sponsors Tron, Chainalysis & IWC Schaffhausen
About Tron
TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized Web3 services boasting over 100 million monthly active users. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. | TRONDAO | Twitter | Discord |
About Chainalysis
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VC exec makes the bull case for NFT's and the 'metaverse'
Crypto venture investing is heating up.
In 2021, VCs poured $3.18 billion into crypto startups in Q1 2021, an increase from $1.1 billion in Q1 2020.
On this episode of The Scoop, Vanessa Grellet, CoinFund’s newly joined Head of Portfolio Growth, joins the show for a discussion on the current state of the crypto venture capital market.
“If you compare the deal flow of crypto compared to private equity and hedge funds and the general space, it's still small. And I think there's a few cycles right now. We see the products getting product markets, trade and adoption with consumers. So you see a big deal flow of the more mature series coming up and institutional investors really getting interested here. And then innovation continues at a very rapid pace in the space,” she told The Scoop's Frank Chaparro.
Grellet, who previously led strategic initiatives for Ethereum at Consensys, also walked us through some of the investment opportunities CoinFund is eyeing. She touched specifically on NFTs and the metaverse — referring to a convergence of physical and digital lives in a digital space. Grellet is bullish that certain groups will begin spending more time in the digital world, buying up digital land, collectibles, and other NFTs.
“[We’re] having digital first generations who are going to live in the Metaverse, who are buying land, who are buying clothes, who are buying experiences there, it creates almost like a second huge market for consumer goods and experience,” she said.
(CoinFund is known for its presence in the NFT market, having previously invested in Genies, Upshot, and other NFT groups.)
Grellet also teased an upcoming announcement from CoinFund on their new vehicle “Metaversal,” which will help capture consumer interest in NFTs in the metaverse.
Episode 35 of Season 3 of The Scoop was recorded remotely with The Block’s Frank Chaparro and CoinFund's Head of Portfolio Growth Vanessa Grellet.
Listen below, and subscribe to The Scoop on Apple, Spotify, Google Play, Stitcher or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com.
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