- We explore the world of crypto venture capital firms with a keen look at the crème de la crème.
- An assessment of their role in fueling progress in the crypto market.
- Investors should include crypto VCs in their basket of indicators
Venture capital has been a huge driving force in the private equity segment and this is true for the crypto industry, judging by the presence of top crypto venture capital firms.
Before we dive in, it would be prudent to look into what they are and what it takes to qualify in the list of top crypto venture capital firms. The standard definition is that venture capital firms are organizations that provide funding to startups or businesses that have robust growth potential. The crypto industry represents one of the segments that offer high potential returns, thus it has been quite attractive to venture capital.
Why are the top crypto venture capital firms important?
Venture capital firms in the crypto segment are very important to promising projects that need financial injection. They can invest enough funds to set the project in motion. Once they secure initial funding, crypto projects may then find it easier to attract more investors especially from both retail and institutional categories.
For crypto investors, one can argue that keeping track of where top venture capital firms are investing their money could provide some insights into projects that have the most growth potential. If it is backed by VCs then chances are it is funded well enough to get through the most difficult phases of growth which are usually the initial phases.
What we considered when categorizing the top crypto venture capital firms
- Asset base: We look at the value of assets that each VC firm in this list controls. A high asset base underscores its capacity to invest big bucks into an upcoming project.
- Level of investment and involvement in crypto: VCs that have vested interest in the success of other crypto projects especially those that achieved some level of success in the past, highlights influence and probability of success for newly funded projects.
- Operational jurisdiction: Venture capital firms that operate in highly regulated regions such as the U.S are more trustworthy compared to their counterparts. This determines the level of friction that is associated with investments flowing in crypto.
Our top crypto venture capital firms list
Pantera Capital
This is a U.S based VC firm and hedge fund that has a healthy reputation of investments in a variety of segments including crypto. Pantera Capital has over $3 billion worth of assets under management (AUM) in crypto. It invested in Bitcoin in 2013, making one of the earliest investors in crypto.
Some of the crypto projects in which Pantera Capital has invested in include Anchor, Polkadot, Kusama, Acala, Coinbase, Alchemy and 1Inch among others. Its crypto portfolio spans over 100 tokens and projects.
Coinbase Ventures
It takes people and organizations that are in crypto to build WEB3 and Coinbase Ventures is one of the VC firms aiming to do just that. Just as the name suggests, this is a firm that is affiliated with the Coinbase exchange. It is based in California, USA and billions worth of assets under management.
Coinbase Ventures was launched specifically to support crypto project fundraising and launches. It has been around since 2018 and during that time it has invested in over 350 crypto startups across the DeFi landscape. Some of the noteworthy projects that it has funded include OpenSea, Magic Eden, Etherscan and NEAR.
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Sequoia Capital
This is a California-based VC firm that has been around for 4 decades, making it one of the oldest firms on this list. Its AUM is over $1.4 trillion which highlights the massive scale at which this company operates. However, Sequoia Capital’s crypto portfolio over $9 billion which is still quite a hefty contribution to the industry.
Sequoia Capital provided seed funding for some of the big names in the crypto industry. Some of them include Certik, Layer Zero, Binance and Polygon.
Binance Labs
Just like Coinbase Ventures, Binance Labs is a project that was created from the success of an exchange. In this case, Binance. The latter uses it as its investment division designed to fund startups. By doing so, it helps to expand the Binance ecosystem. Binance Labs has an address in Hong Kong.
Binance Labs has been around since 2017, making it one of the largest venture capital firms on this list. It has so far supported over 50 projects, with over $7.5 billion in AUM. Some of the projects it has supported in the past include Chiliz, NEAR Protocol, Ankr, Aptos, Maveric Protocol and Polygon, just to name a few.
Galaxy Digital
It is one of the most popular venture firms in the world. It has a crypto and blockcain-oriented division called Galaxy ventures which was launched in 2018, meaning it has been around for the last 2 bull and bear cycles.
Galaxy Ventures has invested in projects such as 1Inch, Cosmos and Polygon just to name a few. It is also involved in Bitcoin mining, running numerous mining facilities. GV investments are also spread out across multiple blockchain segments including infrastructure, GameFi, NFTs and stablecoins. Galaxy ventures had over $2.3 billion in AUM as of June 2023.
A16Z
This is a San Francisco-based venture capital firm that has been around for over a decade. It was launched in 2009 and is popularly known as Andreessen Horowitz. A16Z is one of the biggest early investors in crypto with over $35 billion assets under management.
A16Z has robust exposure in WEB3, with investments spread across various segments including NFTs and DeFi. Some of the projects it has funded in the past include Dapper Labs, Fei Protocol, LayerZero and Maker.
Conclusion on top crypto venture capital firms
These VCs are just some of the many participants that have made significant contributions to the crypto market. Most of the top crypto and blockchain-related projects that exist today would likely not have succeeded if it was not for them. The top crypto venture capital firms invest in the industry because they see potential. This is why following in their footsteps might be a useful strategy because projects supported by VCs have a significant chance of attaining success.
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