Crypto VCs Share Best Practices for Web 3.0 Crypto Startup Success

Examples of Web 3.0 Crypto

When launching a new cryptocurrency, venture capital (VC) financing is often considered the fastest way to do so. However, the high-risk, high-reward nature of the rapidly evolving field can be uncertain. At the Ethereum Community Conference event in Paris, several VCs shared their strategies for successful startups.

Ryan Barney, an investor at Pantera Capital, advised founders to “focus on the whales/VIPs” or target affluent customers rather than attempting to scale quickly. He also mentioned the successful Blur airdrop as an example of how a well-designed airdrop with an emphasis on user engagement can help boost traction.

Barney gave two examples of strategies that have not worked, namely initial coin offerings (ICOs) and influencer marketing. He believes that recent regulatory headwinds have made it difficult for institutions to participate in ICOs. Additionally, influencer shilling without disclosing conflicts of interest and “front-running” followers have caused users to be wary of trusting them.

However, Tony Cheng, general partner at Foresight Ventures, disagrees. He believes influencer marketing is “super important” in crypto because application developers have few ways to drive users to their platforms other than Twitter or Telegram. As Cheng told Cointelegraph:

Examples of Web 3.0 and Crypto Marketing

Cheng warned against excessive influencer marketing, noting that it could lead to users losing trust in the KOLs they follow. He suggested that projects should align with their user base and ensure that the message they send is in line with the company’s vision. “The only reason some projects take off versus others is because of paid marketing,” he wrote.

Cheng also suggested that the recent SEC ruling in the Ripple case could open the door for founders to pursue non-institutional token sales or ICOs. However, he cautioned against “going all in” on ICOs until further regulatory clarity is established. He mentioned that the ruling could be applicable to other fundraising mechanisms, such as initial decentralized exchange offerings and initial farm offerings. “I think, in the U.S., ICOs might be the only way to actually raise money in the future,” he stated.