Venture capital exec says ‘lack of innovation’ drives funding away from crypto
Compared to 2022, where the first and second quarters of the year saw a combined $20.3 billion flow into the space through VC funding, 2023 has been significantly lacking.
Venture capital funding for the crypto space has significantly declined this year. In the first quarter of the year, around $2.6 billion worth of crypto VC deals were made. In Q2, the space saw around $2.1 billion across 292 funding rounds, which is one of the worst performances in terms of crypto fundraising.
Amid the current VC funding situation, Cointelegraph’s Zhiyuan Sun recently interviewed Tony Cheng, a partner at the crypto investment firm Foresight Ventures, to speak about how the lack of new innovations may be driving venture capital firms away from the space, how founders should act to survive the bear market and what companies should prioritize between user growth and profit.
According to Cheng, most of the narratives such as layer-2 solutions, zero-knowledge and nonfungible tokens (NFTs) have "largely played out.” The executive believes that these "kind of died down" with the lack of trading volume on exchanges and in decentralized finance (DeFi). He explained:
In addition, the executive said that due to the limited market activity and number of users, the space hasn't been able to "see too much traction in any direction." However, the executive remains positive that things can turn around when there's a better macro landscape and when people get more pumped about the next crypto cycle.
When asked if founders within the space should take funding offers even though the terms may not be as good as they would expect, Cheng said that the main thing to do at this point is to “survive.”
“If you are lacking in capital, if you don't have the
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