If startups require funding from investors to further build and scale their businesses, how should they manage their relationship with the moneybags?
Speaking at the Istanbul Blockchain Week 2023, Vineet Budki, the CEO & Managing Partner of Cypher Capital, said he believes although the funds provided by investors are important for startups, investors should not tell startups how to run their businesses.
He added that investors can be a valuable source of useful advice if the startup’s team wants to get such advice, as that is how he operates as an investor in the web3 space.
Additionally, he pointed out the importance of seeking smart money—investments that not only provide funds but also open networks, industry knowledge, and connections that can drive a startup’s growth.
Cipher Capital is a Dubai-based venture capital firm with a portfolio exceeding $100 million that has been making waves in the crypto industry with over 300 investments.
A significant portion of its investment portfolio is in the blockchain sector, supporting projects such as Casper Labs, Mission Labs, and Sei Network.
Still speaking about startups, he added that before pitching to VCs, it is important to have a well-prepared elevator pitch that articulates the problem they aim to solve, their traction, and the value they offer instead of presenting unimportant matters.
The Softbank of Web3
Addressing the audience on how his firm is committed to the industry, Vineet said that Cypher Capital wants to be the Softbank of Web3.
However, he shared his concern that the dream is similar to having a huge centralized organization which is the opposite of the ground principles of Web3.
But they want to make capital available to teams building the best products in the industry.
The Managing Partner also noted that, despite the bear market situation in crypto, they have been involved in several companies.
The CEO voiced the firm’s dedication to investing in three to five projects despite the ongoing “crypto winter,” due to the rise of qualitative projects and visionary entrepreneurs.
Web3 is faster than traditional VC spaces
One of the key takeaways was the rapid pace at which Web3 startups are emerging and maturing. Unlike traditional investment journeys that span several years, Web3 startups are experiencing accelerated growth and expansion within a relatively short time frame.
He noted that this phenomenon, often compared to the rapid evolution of the Indian stock market in the 1980s, reveals the importance of early-stage investments and staying ahead of the curve.
Also, he noted that while the web3 ecosystem aims to decentralize control and empower users, true decentralization is still a work in progress.
Many Web3 projects retain certain centralized aspects, particularly in terms of decision-making and ownership.
However, he said that the essence of decentralization lies in shifting power dynamics and allowing users to have more influence over their digital assets.