Crypto VCs share lessons on startup success at EthCC
When bringing a new crypto to market, the fastest way to do so is arguably with the help of venture capital (VC) financing. But such a high-risk, high-reward operation in a rapidly evolving field can carry a large degree of uncertainty. At the EthCC event in Paris, several prominent VCs decided to share their insight on which strategies have worked out for startups.
For a successful launch, Ryan Barney, an investor at Pantera Capital, recommends founders "focus on the whales/VIPs," or emphasize selling to an exclusive, affluent clientele as opposed to trying to scale at the very start. In addition, Barney raised the example of the successful Blur airdrop and how a well-designed, marketed airdrop focused on optimizing user engagement within a protocol can boost traction.
Regarding what has not worked, Barney had two main examples: initial coin offerings (ICOs) and influencer marketing. Regarding the first, Barney believes recent regulatory headwinds have essentially made it impossible for institutions to participate in ICOs. As for influencer marketing, Barney said that recent cases of influencer shilling without disclosing conflicts of interest and "front-running" followers have made it difficult for users to trust them.
However, Tony Cheng, general partner at Foresight Ventures, disagrees. For Cheng, influencer marketing is actually "super important" in crypto because application developers have few ways to drive users to their platforms other than Twitter or Telegram. As Cheng tells Cointelegraph:
That said, Cheng warned against the other extreme of reckless influencer marketing: "You can't always have [KOLs] shill stuff because otherwise, the users are gonna get burned and they're just not gonna follow them anymore." He
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