Key takeaways
- Web3 fundraising has developed; buyers now demand sturdy enterprise fashions, clear tokenomics and market validation.
- Keep in mind, good cash issues; past funding, strategic buyers can present mentorship and {industry} connections.
- A number of funding choices can be found — VCs, angel buyers, grants, ICOs and crowdfunding every have their benefits.
- You will need to know when to pivot — If traction is low and sources are depleting, reassess or transfer on to a brand new alternative.
For those who had been in crypto again in 2017, you may keep in mind Centra Tech, a Miami-based firm that carried out an ICO. The corporate claimed to supply a cryptocurrency-based debit card backed by main cost networks like Visa and Mastercard — however in actuality, it had no operational product.
Regardless of being on the “thought” stage, Centra Tech raised over $32 million in its ICO and even secured endorsements from celebrities like Floyd Mayweather Jr. and DJ Khaled.
Lower than a yr later, its founders had been arrested. It was later revealed that the corporate had no precise partnerships with the cost networks and no actual product.
Centra Tech was simply one in every of many “ICO Growth” initiatives that secured funding primarily based on white papers alone, with out an MVP (minimal viable product). A report by Material Ventures and TokenData highlighted that in 2017, 435 profitable ICOs collectively raised about $5.6 billion, with a mean of $12.7 million per undertaking.
What’s loopy is that fewer than half of those ICOs remained lively past 4 months after their token gross sales concluded. A research reported that over 80% of ICO projects in 2017 had been recognized as scams.
Certainly, the times of simple cash are lengthy gone. Many startups in 2025 are searching for funding, anticipating the identical stage of enthusiasm, solely to be met with elevated regulatory scrutiny, investor warning, excessive competitors and finally, low success charges.
But it surely’s not all doom and gloom. Traders are nonetheless on the market for initiatives that actually stand out.
At this time, you’ll study the preferred methods to fundraise in Web3, all the way in which all the way down to what to do if you happen to’ve solely obtained a cell phone and a dream.
Furthermore, there’s a deal with on the finish, an unique sit-down with the top of enterprise growth at Cointelegraph Accelerator, providing useful insights on the present state of Web3 funding.
1. Incubators and accelerators
Incubators and accelerators play an important position in serving to Web3 startups transfer from thought to market. These applications present mentorship, sources and funding to help early-stage initiatives. Right here’s the distinction:
- Incubators: These give attention to startups within the ideation part, offering steering, networking alternatives and sources to assist construct an MVP.
- Accelerators: They work with startups that have already got an MVP, providing funding and mentorship to assist scale quickly. Most conclude with a demo day, the place initiatives pitch to buyers.
Notable Web3 applications embody:
- Outlier Ventures Base Camp: A 13-week accelerator program for Web3 and crypto startups.
- Alliance: Gives every day mentorship and versatile funding for Web3 founders.
- Antler: A world early-stage investor with a 26-week startup program.
- Brinc: A ten-week accelerator offering funding, mentorship and a worldwide community.
And, in fact, Cointelegraph has its personal accelerator program, providing as much as $100,000 of “smart money,” supplying you with direct entry to infrastructure suppliers, buyers, mentors, foundations, exchanges, market makers and extra.
For those who’re trying to apply to a Web3 startup accelerator or incubator, analysis applications that align along with your undertaking, put together a powerful pitch deck and submit functions by way of their official channels.
Every program has its course of and deadlines, so test the necessities beforehand.
2. Enterprise capital (VC) funding
For Web3 startups that want severe capital, enterprise capital (VC) companies are a go-to possibility.
Traders are extra selective, anticipating clear enterprise fashions, sustainable tokenomics, and robust authorized foundations. Right here’s what you’ll want to know.
Discovering the precise Web3 VC
Not all VCs are occupied with blockchain, so it’s essential to focus on companies specializing in Web3.
Search for buyers who’ve backed related initiatives and have a monitor file in crypto, DeFi or NFTs. Sources like Alchemy’s listing of Web3 VC companies may help you identify the precise gamers.
When reaching out, guarantee your pitch highlights what makes your undertaking totally different. VCs obtain a whole bunch of functions, so you’ll want to stand out — whether or not by way of an revolutionary use case, sturdy traction or a killer staff.
Structuring VC offers
Web3 funding typically entails a mixture of fairness and token allocations.
Traders might take a stake in your organization whereas additionally receiving a share of tokens, which may improve in worth over time. Key issues to barter:
- Funding quantity: How a lot capital is being raised, and at what valuation?
- Fairness vs tokens: Will the deal embody each? If that’s the case, what’s the cut up?
- Vesting schedules: Traders might have lock-up durations to stop early sell-offs.
- Governance: Will VCs have decision-making energy in your undertaking?
One of the best offers align incentives between founders and buyers. A nasty construction might imply dropping management over your undertaking.
Due diligence: what VCs count on
Earlier than signing a deal, investors will conduct due diligence — a deep dive into your undertaking’s financials, authorized standing and enterprise mannequin. To be ready, you’ll want:
- Authorized documentation: Firm registration, contracts and compliance with rules.
- Tokenomics mannequin: A transparent plan for token distribution, utility and long-term sustainability.
- Roadmap and traction: Demonstrated progress, whether or not by way of partnerships, a working product or an lively group.
A robust enterprise case, mixed with stable authorized and monetary documentation, will make your undertaking extra enticing to buyers.
Do you know? Scammers impersonating enterprise capitalists (VCs) within the Web3 area purpose to use startups’ eagerness for funding by using misleading techniques to steal cash or delicate data. At all times hold your wits about you!
3. Angel buyers
Angel buyers — high-net-worth people who make investments their very own cash — can present early-stage funding with extra flexibility than VCs. However securing angel funding isn’t nearly numbers; it’s about discovering somebody who really believes in your imaginative and prescient.
For those who’re engaged on a Bitcoin layer-2 solution, your greatest wager isn’t a generic tech investor; it’s a Bitcoin whale who desires to see the community scale. Traders are much more more likely to again a undertaking after they have a private stake in its success, whether or not ideological or monetary.
So the place do you discover these individuals?
Conferences.
Occasions like Token2049, ETHDenver and Consensus are stuffed with angels in search of their subsequent alternative.
Cointelegraph spoke to random attendees at Token2049, and practically all had cash to take a position.
Past conferences, Web3 X, Telegram and personal investor teams are nice locations to construct relationships. Heat introductions could be the distinction between getting a gathering and getting ignored.
Angel buyers could be a number of the most supportive backers in Web3. You simply have to be in the precise place, with the precise pitch on the proper time.
4. Grants and ecosystem funds
Many blockchain platforms have established grant applications to help initiatives that improve their networks.
Basically, “For those who construct your undertaking on our blockchain, we’ll again you!”
As an illustration, the Rootstock grant offers $2.5 million quarterly to builders constructing on the Bitcoin blockchain. Equally, the Starknet seed grant program provides non-dilutive funding to early-stage groups with an MVP aiming to enter the market.
To extend your possibilities of securing a grant:
- Align with the grantor’s mission: Guarantee your undertaking’s objectives resonate with the aims of the funding group.
- Exhibit undertaking viability: Current a transparent roadmap, together with milestones and a sustainable enterprise mannequin.
- Spotlight potential affect: Clarify how your undertaking will profit the ecosystem and its group.
- Observe tips meticulously: Adhere to utility directions and supply all required documentation.
For detailed steering, check with the Rootstock grant application guide, which provides insights into eligibility and analysis standards.
Do you know? The biggest Web3 grant in historical past might go to Lotte Group, a South Korean company big, by way of an Arbitrum Basis grant, marking a shift from funding indie builders to backing massive enterprises in Web3.
5. ICOs and token gross sales
Imagine it or not, initial coin offerings (ICOs) and token gross sales are nonetheless widespread strategies for blockchain-based initiatives to boost capital.
An ICO entails creating and distributing a brand new cryptocurrency token, which buyers buy utilizing established cryptocurrencies like Bitcoin (BTC) or Ether (ETH).
These tokens might grant holders entry to a selected service, voting rights or a share within the undertaking’s potential earnings. The ICO course of usually consists of:
- White paper launch: An in depth doc outlining the undertaking’s idea, technical specs, staff background and funding necessities.
- Advertising marketing campaign: Efforts to generate curiosity and construct a group across the undertaking.
- Token sale occasion: The interval throughout which buyers should purchase the newly issued tokens.
Keep in mind, in lots of areas, tokens provided in ICOs are thought-about securities, subjecting them to particular authorized necessities. As an illustration, the US Securities and Trade Fee (SEC) has indicated that many ICOs contain the providing of securities and should adjust to federal securities legal guidelines.
Noncompliance can result in authorized actions, monetary penalties and harm to the undertaking’s fame. Subsequently, it’s essential to seek the advice of with authorized consultants to make sure adherence to all relevant legal guidelines and rules.
To extend the chance of a profitable ICO:
- Develop a transparent tokenomics mannequin: Outline the token’s utility, complete provide, distribution plan and mechanisms to incentivize holders.
- Set practical fundraising objectives: Decide the quantity wanted to attain undertaking milestones and keep away from overcapitalization.
- Construct group belief: Have interaction transparently with potential buyers, present common updates, and display the staff’s competence and dedication.
By fastidiously planning and adhering to regulatory tips, initiatives can leverage ICOs and token gross sales to boost capital and foster a devoted consumer base.
Do you know? Influencers could be a part of your ICO fundraising technique by receiving tokens straight to advertise your undertaking. This method is typically known as an ‘influencer spherical.’
6. Crowdfunding
For those who’re on the thought stage with out funding, bootstrapping growth prices to construct your MVP could be difficult.
On high of that, you may not have angel investor contacts or the funds and time to attend investor occasions.
It’s a difficult place, particularly if you happen to’ve spent months sending chilly LinkedIn messages to potential buyers with no success.
So, as an alternative of leaving half our viewers with out recent concepts, we’re introducing Web3 crowdfunding as a option to bridge the hole. Whereas it could not cowl every part, it will possibly assist with some MVP growth prices.
Conventional crowdfunding platforms like Kickstarter and GoFundMe are centralized and don’t combine with blockchain-based fundraising fashions, making them unsuitable for Web3 initiatives. As a substitute, Web3 startups usually flip to initiatives comparable to Gitcoin grants — those who offer crowdfunding for public items and open-source blockchain initiatives.
And if you happen to’re nonetheless struggling to secure funding, you may wish to attempt an industry-agnostic platform like UFANDAO.com.
This platform stands out for its skill to facilitate crypto fundraising for any thought, with donations coming from people who resonate with the imaginative and prescient and want to contribute to the collective happiness of humanity.
Whereas it’s unlikely that will help you elevate a whole bunch of 1000’s of {dollars}, it is perhaps the push that will get your paper airplane off the bottom.
UFANDAO provides:
- Peer-to-peer donations: Contributions are made straight between members in real-time, guaranteeing instantaneous entry to funds with out intermediaries.
- Zero commissions: The platform doesn’t cost any charges on donations, so that you obtain the complete quantity.
- Entry to a worldwide group: Out there to anybody with web entry.
- Versatile fundraising: Increase funds for something, from private objectives to Web3 improvements.
And there you’ve gotten it — our wildcard for these with nothing however a smartphone and a dream.
You possibly can’t say this text wasn’t complete!
The state of Web3 fundraising in 2025 with Anna Shakola
As a part of the analysis for this text, a dialog was held with Anna Shakola, the top of enterprise growth at Cointelegraph Accelerator, to realize an insider’s perspective on the present state of Web3 fundraising.
Listed below are three key moments from the dialog which can be value sharing with you.
1. What are Web3 buyers at present in search of?
Gone are the times when a startup might elevate tens of tens of millions of {dollars} on the premise of a white paper.
The {industry} has suffered from poor-performing Web3 portfolios, from investing in initiatives that confirmed a scarcity of progress or ended up being scams.
The {industry} is getting larger, sure, however this has additionally meant that there are extra startups, increased ranges of competitors, and investor danger tolerance has lowered.
Proper now, we’re in search of infrastructure, B2B, and growth-stage initiatives with confirmed market demand. I feel this displays the broader funding urge for food.
I might emphasize that infra is absolutely the brand new alpha.
2. What’s your recommendation to a Web3 startup in 2025?
Listed below are the issues I’d give attention to in the beginning:
- Take into consideration who you’re. Be particular, be trustworthy, and do not forget that you don’t have to reinvent the bicycle. Make sure of the issue you’re fixing. Robust undertaking id is essential.
- Verify investor portfolios. Have a look at the accelerators, VCs and angel buyers you’re reaching out to. Don’t contact everybody mindlessly — you’re losing your time.
- Think about grants and ecosystem funds. These are sometimes ignored. You may even wish to validate your thought at hackathons or by way of bug bounties. That is the place buyers might be paying consideration.
- Search good cash. It may not be sufficient to safe funding from laissez-faire angel buyers. Concentrate on offers that can deliver you stable, complete help.
3. At what stage ought to a founder surrender attempting to fundraise for his or her undertaking?
It’s an attention-grabbing level as a result of ordinarily, most individuals would say by no means.
Nevertheless, you’ll want to contemplate the chance value of time spent reaching out to VCs, touring to occasions, transforming the MVP and the financials concerned.
I’ve a listing of founders that I attain out to yearly as a result of they launch new initiatives every time there’s a pattern. It’s vital to adapt. If one thing doesn’t work, don’t be afraid to scrap it.
I feel that when the cash runs out, the undertaking turns into a monetary burden, the staff is burned out and dealing at low effectivity, and there aren’t any significant conversations with buyers underway, these are all indicators that it is perhaps time to maneuver on.
Keep in mind, most of the time, VCs discover you — you don’t discover VCs.
Past ICOs to good cash: Navigating the way forward for Web3 fundraising
In case the gorgeous quantity of double ticks you’ve obtained from VCs on Telegram hasn’t painted the image for you, fundraising in Web3 has modified massively for the reason that ICO growth of 2017.
At this time, securing funding requires greater than only a white paper and some good connections. It calls for a powerful undertaking id, a well-structured enterprise mannequin and the power to display actual market demand.
Whether or not you pursue enterprise capital, angel buyers, grants, token gross sales or crowdfunding, understanding the precise method to your stage of growth is essential.
Most significantly, as Anna talked about, securing good cash — funding that comes with strategic help — could make all of the distinction.
If one technique doesn’t work, pivot, refine and hold pushing, even when you find yourself fundraising to your MVP over at UFANDAO.
But when the challenges develop into overwhelming and traction stays elusive, understanding when to maneuver on is simply as vital as understanding when to persist.
Good luck!
