<\/p>\n
\u201cIt\u2019s a tough fundraising environment out there,\u201d says Santiago Santos. But he insists that the \u201cgood companies are still getting access to capital.\u201d<\/p>\n
Fundraising rounds in Web3 are still happening, the angel investor says, but they\u2019re \u201cvery concentrated\u201d and \u201cselective\u201d in the current market conditions.<\/p>\n
On the Empire podcast (Spotify<\/a>\/Apple<\/a>), Santos says he is shocked to see \u201chow some teams are just able to blow through $15, 30 million in one year.\u201d<\/p>\n \u201cThey just threw bodies at problems,\u201d he says.<\/p>\n Santos says he often sees companies operating with the wrong priorities. \u201cA lot of teams come to me and say, \u2018Hey, we\u2019re going to raise another five, 10 million because we want to hire a head of marketing,\u2019 and I\u2019m like\u2026you don\u2019t even have a product.\u201d<\/p>\n \u201cWhy don\u2019t you just double down on the product?\u201d he says.\u00a0<\/p>\n Read more:<\/strong> Crypto funding: A $50M week for encryption cryptography, NFT memberships<\/a><\/p>\n The good teams, Santos says, are very technical and run \u201clean,\u201d with founders who are \u201cvery competent.\u201d<\/p>\n \u201cI just got a demo from one of the teams that I was an investor in and they\u2019ve just been incredibly lean,\u201d he says. \u201cThey\u2019re very technical,\u201d he says. \u201cIt\u2019s just a very skeleton organization, just bare bones, just building the product.\u201d<\/p>\n \u201cThey\u2019ve identified a niche in the market and they\u2019re going after it,\u201d he says. \u201cThose are the teams that are getting funded.\u201d<\/p>\n Unfortunately, Santos says, the majority of teams are bloated organizations carrying high executive staff costs while spending excessively by \u201cgoing to all these conferences.\u201d\u00a0<\/p>\n \u201cHold on here,\u201d he says. \u201cBuild a product. Find product market fit.\u201d<\/p>\n Yanowitz adds that a number of \u201clater stage companies\u201d like Chainalysis, Ledger and Yuga Labs<\/a> are also facing layoffs. \u201cThey need big capital. They\u2019re raising maybe series B, series C, series D.\u201d<\/p>\n \u201cVCs are saying, \u2018Look, I actually like your company, but your burn is too high, so you need to first cut your burn, then we\u2019ll allocate,\u2019\u201d he explains.\u00a0<\/p>\n Read more:<\/strong> Billionaire-backed Hong Kong crypto VC pours $100M into blockchain fund<\/a><\/p>\n Yanowitz expects that many Web3<\/a> companies are not announcing their raises right now due to poor market conditions. If a company is down 66% from their last raise, he says as an example, \u201cthere\u2019s no way you\u2019re announcing a big down round.\u201d\u00a0<\/p>\n \u201cYou do everything in your power to keep that fundraise quiet.\u201d<\/p>\n Don\u2019t miss the next big story \u2013 join our\u00a0free daily newsletter<\/a>.<\/strong><\/p>\nIdentify a niche and go after it<\/h2>\n
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