How can startups survive the crypto bear market?
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How can startups survive the crypto bear market?
What should cryptocurrency founders do when raising funds in today's environment?
Navigating Web3 tides with focused insightsWritten by: Imran, Founder of Alliance DAO
Compiled by: TechFlow intern
What should crypto founders do when fundraising in today's environment? Over the past two weeks, I've spoken with over 40 founders—here’s my advice to them:
Stay Calm and Confident
Investors may not give you a clear answer. If there's no response, don't let it shake your confidence. Your team needs you more than ever right now—you must believe in yourself and in the product you're bringing to market.
Survival First
Survival is paramount until your product achieves market fit. Remember, Aave, Compound, dYdX, Uniswap, and others were all built during bear markets.
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1. Close your funding round as planned
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2. Apply for grants—$250 million available
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3. Be flexible on terms/valuation
Product-Market Fit (PMF)
Founders need leverage, which comes from optimizing PMF and user traction. If you’re not gaining the traction you want, pivot quickly until you achieve solid PMF.
Pricing and Valuation
Over the past 18 months, founders raised funds at high valuations across different markets. Don’t compare or compete—focus on survival and raise on terms that give you room to grow. Here are the valuations we’re seeing:
Pre-seed: $3M–$9M
Seed: $10M–$15M
Be Frugal
The most common expenses I see among crypto startups are hiring too quickly and spending on events/conferences. @eladgil discusses in his book “High Growth Handbook” that you should only hire when the person leading that function/role is operating beyond capacity.
Build a Tight Network
After speaking with many founders—I was fortunate to meet @__mikareyes, who has built a strong community of functionally-aligned founders. If you’re a founder or investor looking for support, reach out to her.
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