Seth Jeans of CoinFund on why the cryptocurrency downturn spared early-stage startups • CableFree TV

Published by
Peter Kavinsky

Crypto token prices have been on a downward trend in the last year, with BTC and ETH dropping by more than 50% since last September. However, despite the slump in cryptocurrency prices, early-stage web3 startups have shown remarkable resilience in their valuations, Seth Jeanns, managing partner and head of liquid tokens at digital asset investment firm CoinFund, told us in an issue Tuesday. Chain reaction.

Startups weren’t completely immune to the economic downturn, Ginns said, with late-stage companies suffering the biggest loss in valuation during the market downturn. Jeanns has a broad understanding of different parts of the crypto market as an investor in CoinFund, who invests in private investments such as startups as well as liquid investments such as crypto tokens.

You can listen to the full episode with Jeans here:

“When liquid markets present the best opportunities, we can rely more on liquid markets, and when VC markets present the best opportunities, we can rely more on them,” Ginns said of CoinFund’s strategy. While Ginns said he has seen late-stage cryptocurrency startups suffer depreciation in value over the past few months, the downturn appears to have spared seed-stage companies to some extent, he noted.

“I would say that at an earlier stage you just see a step down from where the scores are meant to be. [startups where] Either the team just got together and kick off this real pre-round, or the next phase right after it, when you’re not sure if their product is still in the market, but you have a great team and some great early momentum from BD, I’d say that those initial preliminary estimates are down a bit,” Ginns said.

For early-stage startups, valuations dropped by about 15-30%, Ginns estimates, which is a much less severe drop than what we’ve seen in token prices and even public tech stocks.

Cryptocurrency startups at an early stage are valued “differently than traditional technologies at this stage were two or three years ago. They also haven’t reached the level that crypto was two or three years ago and I’m not sure they will get there,” Ginns said, explaining that he doesn’t think the valuation of these early-stage companies will drop as much. low, as in previous market cycles.

So what drives this resilience?

“I think one of the really interesting dynamics in crypto is that in every cycle we see the network scores for protocols go up by an order of magnitude, I don’t think it will stay an order of magnitude in every cycle but they are big steps.” up. And every time you take that step, you get confirmation of that new valuation range, which means you end up with people thinking about how to value your startup early on, referring to the latest valuation you received in the last bull. market,” Jeans explained.

Chain reaction airs every Tuesday and Thursday at 12:00 pm PT, so be sure to follow us on Apple Podcastsovercast and Spotify to keep up with the action.

Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

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