Last week, we discussed how venture capitalists and startup accelerators were warning startups to prepare for a potential recession. From Y-Combinator to Sequoia to other big-name companies, the outlook was not looking good. Amidst the fear, some in the startup and venture space are buying instead of selling. One of the biggest names and examples of this is crypto focused VC firm “Andreessen Horowitz,” which plans to push billions of dollars into crypto startups despite the digital asset sitting in a trough. The correlation between crypto markets and venture capitalists funding projects within the space is limited, at least for now. Last year alone Blockchain startups pulled in a record $25 billion in venture capital funding, an eightfold gain from the year prior.
Even so, there have been critics of the nature of venture funding in “Web3”, including criticism from tech giants like Elon Musk and Jack Dorsey. For example, Dorsey has said that as far as investment continues how it is right now in the Web3 space, VCs and small groups of partners are the ones who will own the space and that Web3 is just a “centralized entity with a different label”.
What do you think of Web3 venture funding, and is it just a bubble that will pop as soon as a recession hits?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.