Compared to 2022, where the first and second quarters of the year saw a combined $20.3 billion flow into the space through venture capital funding, 2023 has been significantly lacking.<\/p>\n
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.<\/p>\n
Amid the current VC funding situation, Cointelegraph\u2019s 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.<\/p>\n
According to Cheng, most of the narratives, such as layer-2 solutions, zero-knowledge proofs and nonfungible tokens (NFTs), have \u201clargely played out.\u201d The executive believes that these \u201ckind of died down\u201d with the lack of trading volume on exchanges and in decentralized finance (DeFi). He explained: <\/p>\n
\u201cI think right now the biggest problem and obstacle for a lot of these people is the lack of confidence, mainly because we haven\u2019t really seen any new innovation in this space.\u201d<\/p><\/blockquote>\n
In addition, the executive said that due to the limited market activity and number of users, the space hasn\u2019t been able to \u201csee too much traction in any direction.\u201d However, the executive remains positive that things can turn around when there\u2019s a better macro landscape and when people get more pumped about the next crypto cycle.<\/p>\n
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 \u201csurvive.\u201d<\/p>\n
\u201cIf you are lacking in capital, if you don\u2019t have the runway to kind of get you through the next year or so, you should be taking capital and taking as much as you can get because that money might not be available anymore after maybe two or three months,\u201d he explained.<\/p>\n
The executive highlighted the importance of self-preservation for founders and staying in the game. Otherwise, the venture capital executive said that all the work that had been done in the past few years would be gone.<\/p>\n