Fundraising Firsts: Conquer Crypto Winter & Woo Venture Capital

As tricky as crypto winters can be, there are things you can learn to survive - and in some instances - flourish. Whether you are looking at it from the perspective of making investment decisions or from the perspective of a startup or business involved in risk management & fundraising, this most recent episode of Crypto Legends is for you.

Adam Bialy, CEO & Co-founder of Fiat Republic, was joined by a cadre of crypto industry moguls - Kevin de Patoul, CEO and Co-founder of Keyrock; Michael Stroev, ex-COO at Nebeus, and Anil Hansjee, General Partner at Fabric Ventures - and they plunged into the depths of investment strategies, due diligence and the changing market dynamics amidst the turbulent crypto tides.

Read on to catch the highlights.


Crypto Winter’s Impact on Investments

The onset of a crypto winter invariably heralds a frosty investment climate; a narrative resonated in the 91% investment dip witnessed in January 2023. The collapse of FTX further cast long shadows over the VC community’s sentiment.

Yet, amidst this icy expanse, Keyrock, helmed by Kevin, secured a remarkable $72 million Series B funding. Kevin’s trident of success hinges on a long-term vision, resilience, and steering clear of market hype cycles. Notably, Kevin emphasised the importance of Keyrock’s proposition.

“Different business models can achieve similar outcomes. In our case, being a market infrastructure helps. Despite uncertainties about how digital assets will be used or the mainstream application, the need for liquidity remains constant, ensuring our role’s relevance since digitisation potentially increases an asset’s liquidity.” Kevin said.

Diversifying Fundraising Strategies

Navigating through the crypto winter necessitates a departure from conventional fundraising avenues. According to Michael, when VC interest is low, especially last year, the trick is to explore other avenues according to need.

At Nebeus, for example, they did “several convertible loan rounds with angel investors primarily” last year “which has gotten us to where we are today.” Micheal said. Additionally, this year, they successfully pursued a Seeders equity crowdfunding campaign, raising €1,389,752. All in all, Michael said, this is “the first start to kick start our Series A amount for which we hope to raise approximately €10 million, approximately”.

Investor Perspective: What Stands Out?

Anil, as a general partner at a VC, shed light on the investor psyche. Overall, he stated investors value startups that demonstrate flexibility, resilience, and a long-term vision. The aversion towards unpredictability is common among investors. Startups that adeptly calibrate their strategies to market rhythms, manifesting a clear trajectory, often find favour in the eyes of investors.

Specifically, Anil broke down two types of deals that investors prefer during unpredictable times. The deals closing at the moment are either “those that can address immediate pain points with validation, or they are deals that are looking with some technology tailwinds, like a little further ahead and are more infrastructure focused on bigger trends and are well funded to take that path.”

Due Diligence and Investment Dynamics

The high-octane investment pace often leaves due diligence in the rearview, a reality Kevin acknowledges. Anil, however, pivots the discussion towards post-investment governance, hinting at the FTX debacle not as a lapse in due diligence but perhaps a governance fissure. He explained that fraud, by its very nature, is hidden from view. “I’m not sure that even the best 20-screen analysis and a six-month diligent process would necessarily have cracked that.” 

Information Asymmetry

The dialogue dives deeper with Kevin and Anil exploring the realms of information asymmetry between VCs and startups. Fostering robust investor relationships can be a lever to mitigate this asymmetry.

“[E]ntrepreneurs forget that we’re outsiders looking… We can do a lot of research, a lot of preparation, a lot of following. Still, we’re outsiders looking in, and it’s the entrepreneur that decides what they tell us, what they put in the data room, what they reveal, which references they give, which partners they introduce us to.” Anil said.

Kevin agreed with this assessment: “[F]rom our raise last year, … what made it possible [is that] our investors very well. Be it Ripple, MiddleGame [or] SIX. [We all knew each other very well] which means that by definition, there is less information asymmetry, and, therefore, less dependency on the overall climate.”

Changing Market Dynamics & Current Investment Themes

Keyrock achieved great success in challenging market conditions during the winter of 2022. However, Anil broadened the lens, suggesting that the raise could mark the nadir of the crypto market downturn this cycle. He cites exemplars from previous cycles like Coinbase and Ripple, securing hefty investments during downturns, underscoring the currency of trustworthiness.

“[L]arge fundraisings have happened in the past in downturns in our industry we’ve had multiple ups and downturns. I can’t relate [which winter was] worse than the other, but Coinbase raised in 2013, and Ripple raised in 2015. Interestingly, these were big, chunky double-digit raises.” Anil took it one step further, pointing out the essential themes and propositions of the raises at the time. “Coinbase … focused on regulation and security. Ripple had all of these validation points from their Enterprise Financial Services customers. [It’s] my belief [that] themes in and around security, compliance, efficiency, scaling, [are the] propositions that are doing pretty well [at the moment].”


As we unraveled the layers of fundraising and investment dynamics amidst crypto winters, the Crypto Legends panel illuminated pathways for other enterprises to navigate through these icy financial landscapes. The episode emphasised the importance of being strong, having different strategies, and being trustworthy when investing in crypto businesses.

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