Crypto startups are having a tough time attracting venture capital (VC) funding due to sky-high valuations that far exceed their revenue. Dan Tapeiro, CEO of 10T Holdings, a crypto-focused VC firm, notes that many startups are pricing themselves out of funding by targeting valuations at 50 to 80 times revenue. This makes it challenging for VCs to generate returns for their investors.

Key Points:

Unreasonable Valuations: Startups are often valued too high, making it difficult for VCs to invest.

10T Holdings' Approach: The firm looks for crypto projects with valuations above $400 million to $500 million and a valuation-to-revenue ratio of 10x or less.

Past Mistakes: 10T Holdings has passed on over 200 companies, including now-bankrupt firms like FTX, BlockFi, and Celsius.

VC Funding Trends: Despite high valuations, crypto VC deals rose over 100% quarter-over-quarter to $6 billion in Q1 2025, with the number of deals increasing by 8.8% ¹.

Expert Insights:

Pantera Capital CEO Dan Morehead suggests VCs should diversify their investments by receiving a mix of private equity and tokens.

- 10T Holdings prioritizes realistic valuations, which make follow-on funding rounds more attractive and simplify the exit process ¹.