Crypto startups: 3 things VC investors are looking for

Interest in cryptocurrencies has continued to decline this year. Given the hype, VC investors are looking for the best projects for big investments.

By 2021, interest in cryptocurrency has exploded. There were a few reasons for the increasing attention from outsiders. News like Bitcoin’s new all-time high or the hype surrounding NFTs was hard to ignore.

VC investors: It’s about a lot of money

With the development in the crypto area in full swing, many investors want to come in – and not just the small ones. According to a report by Galaxy Digital, $ 33 billion flowed into the cryptocurrency space of VC investors last year. To put it another way, crypto and blockchain startups received 5% of all venture capital investments made in 2021.

When the biggest names in the investment industry, like Andreessen Horowitz, pour billions into the crypto ecosystem, it bodes well for the future of the industry. But what draws these key investors to the projects and startups in the crypto space?

Here are the 3 best things that VC investors are looking for in crypto projects.

Current topics in the industry

If your start-up deals with the latest topics in the industry, you are one of the lucky ones.

The first VC investment trend shows that investors are aware of industry trends. However, we are not talking about volatile trends like Dogecoin prices. It is sustained movements that practically constitute a “sub-industry” within the decentralized space. A hallmark of such movements is their exceptional growth potential over the next 5-10 years.


GameFi is an excellent example of a sub-industry in the field of cryptocurrency that is currently receiving a great deal of attention. According to Adam O’Neill, CMO at Bitruea digital asset management platform, everyone is talking about this area right now.

“GameFi is full of developers with innovative ideas on how to use blockchain to improve both game mechanics and the underlying economy.”

Although gaming is a proven entry point into the world of cryptocurrencies and blockchains, there is still room for improvement. Some in the GameFi niche feel that the products need to increase their quality (graphics, storyline) if they are to attract investors.


Of course, one must mention the attention to it Non-fungible tokenAttract projects in VC investments. Data from PitchBook showed that nearly $ 900 million in VC investments flowed to NFT-related companies in January 2022 alone.

A very recent example is the well-known Bored Ape Yacht Club (BAYC) series. The collection is known for its expensive NFTs. The most expensive was sold for 769 Ethereum (Bored Ape # 2087). Last month, BAYC’s Yuga Labs completed a $ 450 million financing round. As a result, the company is now valued at over $ 4 billion.

Other hot topics that investors are looking at are practical AI integrations and sustainable, clean-tech companies.

Strong leadership and good communication

The aforementioned Bored Ape Yacht Club is a great example of both industry trends and the next VC investment point.

Investment firms are ready to embark on new ventures with internally and externally sound communities. O’Neill says that “The first question that comes up is the management team’s experience with crypto. What is it? Goal for the future of your projects and the entire industry? Which technically expertise has the development team? “

In addition, ie white paper, which is behind the team, an indicator that the company is in good hands. This shows that the consulting team not only knows what they are doing and can meet the needs of the industry, but also has entrepreneurial skills. In combination with a powerful Leadership team are start-ups that have a good reputation with the public and communicate well, a great success for investors.

“It is a fact that fantastic innovations often do not become successful because the communication around them did not work. We want to ensure that the team can connect with our users in a meaningful way. “

The BAYC creators at Yuga Labs have had great success creating a community and a brand of hype. Your community is over 850,000 followers on twitter. Even entertainment giants like Justin Bieber have bought BAYC NFTs. Actions like these help increase both the value and the community in the company.

3. VC Investors and Clean Tech

Green businesses have a dual benefit. Not only do they help create a greener future for the world, they also attract the attention of investors.

“Environmental concerns are currently one of the biggest obstacles to cryptocurrency adoption. The energy costs of blockchains, especially proof-of-work, have entered the public consciousness. In fact, for many people, this is the main reason they do not have cryptocurrencies. . “

Environmentalists have confronted the industry with concerns about energy-intensive mining and mining, which continue to rise with the popularity of NFTs. In addition, Elon Musk and Jack Dorsey held discussions on a greener future for cryptocurrencies. In 2021, the trend toward Proof-of-Stake (PoS) saw across the industry. PoS has been hailed as being greener because it uses less energy than its predecessor, Proof-of-Work (PoW).

O’Neill adds that in addition to the environmental impact, more investment in this area will eventually lead to greater proliferation. “Any blockchain developer who can make their coin CO2-neutral will have a significant impact on the curious but fearful public. This will be a huge benefit to the developers. So in 2022, keep an eye on crypto companies that are particularly focused on the environment. ”

VC investors: ready to spend money

While these are not the only things on big investors’ watch lists, they are certainly trends that are worth keeping an eye on. Investment in space does not stop for the time being. It is a promising market for those who want to get their ideas started.

“Investment companies and banks are currently in an issuance phase. Analysts expect the crypto market to continue to grow for a few more years. Everyone feels that we are entering a new age of technology, like the invention of the Internet. So companies want to be there from the start and find out what the next blue chip companies will be. “


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