Chainfeeds Summary:
Overall, VCs will not die; they will continue to exist and drive the industry forward.
Article source:
https://x.com/Wuhuoqiu/status/2001286240302473369
Article Author:
Lao Bai
Opinion:
Lao Bai: Asian VCs have probably suffered the most in this round. Since the beginning of the year, most of the top firms have either shut down or dissolved, and the remaining ones may not make a single investment for several months, focusing on exiting their current portfolios and finding it difficult to raise new funds. Second- and third-tier European and American VCs fared relatively well in the first half of the year, which is related to their LP structure and fund size. However, in the second half of the year, especially in the last month or two, Asian VCs have shown a clear trend of decreasing investment frequency, with some simply ceasing investment altogether or transforming into pure liquid funds. The top-tier European and American firms seem to be less affected, at least on the surface. The VC industry as a whole won't die; there's really nothing to worry about. As long as the industry doesn't die, VCs won't die either. Otherwise, who will provide the resources to realize new ideas, new technologies, and new directions? We can't rely entirely on ICOs or KOL rounds, can we? ICOs are more about getting some retail investors and communities on board and creating hype, while KOL rounds are mainly responsible for dissemination—these are things that happen in the later stages of a project. In the very early stages, when there are only one or two founders and a PowerPoint presentation, only VCs can truly understand and actually invest. In over two years at ABCDE, I talked to more than 1000 projects and ultimately only invested in 40. Of those 40 carefully selected, I estimate another 20 or 30 failed. Many projects you see on the market that you consider garbage have already been screened many times and are considered relatively high-quality. Otherwise, with over 1000 projects launching ICOs and KOL rounds, how could retail investors, and even KOLs, possibly distinguish them? A VC's reputation and brand are not primarily about how famous you are among retail investors, but about whether the developers, or founders, are willing to take your money, and why they choose your money over another VC's. This is the true moat of a VC. After this round, VCs are clearly similar to CEXs, shifting from a pyramid structure to a thumbtack structure. We've transitioned from focusing on narratives and white papers in the previous round (or even ignoring them altogether, like when Li Xiaolai raised hundreds of millions for a single idea in 2017), to looking at TVL, VC endorsements, narratives, and transactions in the last round, and now to focusing on real user numbers and protocol revenue in this round... It feels like we're finally getting closer to the direction of the US stock market. A big reason I've always been confident in Web3 is because this industry has gathered some of the smartest people in the world.
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