Crypto glossary
Crypto venture capital
Crypto venture capital is funding from VC firms to blockchain startups in exchange for equity, tokens or both, usually with long vesting and unlock schedules.
Venture firms dedicated to crypto, and generalist funds with crypto teams, invest in early projects through pre-seed, seed and later rounds. Deals often combine shares in the company with a SAFT or token warrant, so the investor receives tokens at a discount when the network launches, typically subject to a cliff and multi-year vesting.
VC money finances much of the industry's infrastructure, from layer 1 blockchains to wallets and DeFi protocols. Funding rounds are closely followed as signals of which narratives will be pushed next, and well-known backers help projects obtain exchange listings and attention.
Venture backing has a cost for later buyers. Tokens launched with a low float and a high valuation leave large investor allocations to unlock over time, creating persistent selling pressure. VC-heavy cap tables can also centralise governance votes. Being backed by prominent funds does not guarantee a project survives.
Example
A new layer 2 raises 20 million dollars in a seed round led by two crypto VC funds, which receive shares plus token warrants for 15% of the future supply, vesting over three years.