Crypto Startups Embrace ‘Rolling’ Fundraising Craze

As a seasoned crypto investor with a few bear market cycles under my belt, I’ve seen firsthand the ups and downs of this volatile yet exciting industry. The latest news about rolling funding rounds in crypto startups piques my interest, but also raises some concerns.

Based on a Bloomberg report, crypto businesses are now employing conventional venture capital methods with continuous or ongoing fundraising through open-ended financing rounds.

Using this distinctive approach, businesses have the ability to secure funds continually and swell their valuations at a rapid pace, thanks to a consistent supply of new investment dollars.

The emergence of these rolling spheres signifies two key aspects: Crypto’s bounce back from the bear market of 2018, and venture capital funds’ eagerness to invest their accumulated funds swiftly. Early investors reap substantial rewards as valuations climb in tandem with each new investment from late-stage financiers.

According to some, the concept of “fluid valuations” in cryptocurrency is not firmly grounded, while others believe that the conventional venture capital model is ill-suited for the rapid tempo at which digital asset firms function. Matt Luongo, an executive at Thesis, a venture studio, expressed this perspective, stating that the process of raising capital in crypto is continuously changing and that concepts like governance and liquidity can vary significantly from what is experienced with traditional startups.

Read More

2024-05-05 16:04