THE BARBELLIFICATION OF CRYPTO VC

Summary from the TLDR Crypto newsletter

Crypto VC funding has split into two extremes: companies that can show fast revenue by riding a market frenzy, which ironically need the least capital, and companies that can absorb large financing rounds from big funds, where the financing itself becomes a moat. It cited Pendle, which raised $3.7 million from Mechanism Capital in 2021 at around $20 million TVL and now generates $13 million in annualized revenue, and Polymarket, which raised $4 million from Polychain in 2020 and took four years to find product-market fit around the 2024 US elections, as examples of firms that graduated between cohorts. The opportunity for seed investors is spotting a future category leader before its edge is obvious to other investors, since firms with only short revenue spurts and no IPO path struggle to get underwritten.