As a primary market investor with a market background,@ABCDE Labs It has always been a fund I respect, and its research and investment level is still on point. Seeing @Du Jun the boss's tweet announcing a pause button, to be honest, I felt reasonable after being surprised for less than a second.

At this moment, I want to share my view of the primary market:



🪫“Evil Dragon” VC :

Is VC really the 'evil dragon' that users say is harvesting retail investors together with project parties?

The core reason for the dilemma faced by primary market VCs today still lies in unlocking this issue. A report on VC tokens from BN indicates that users are generally silent towards VCs, making VCs seem to be the culprits behind users losing money and poor price performance in the secondary market of projects. 'It must be that VCs and project parties are jointly harvesting retail investors,' is what users think.

As is well known, TOKEN is the only exit path for investors. Less than 15% of project parties that raised funds in the primary market successfully list, and among those 15%, less than 10% can list on first-tier exchanges, and once successfully listed on first-tier exchanges, the tokens in the next year are irrelevant to investors. The average duration from investment to exit for a fund project has now exceeded 6 years!

If the project party offers something that users are not satisfied with, users can complain, but investors cannot;

TGE must give the market a large number of airdrops, including studios, retail investors, exchanges, ecological cooperation projects, and self-dealing, but there are no investors;

There will definitely be someone arguing, 'Why don’t you hedge by shorting!' First of all, shorting hedging is a very risky thing, and my tweet today only discusses the current situation of pure primary investment companies.

During financing, we are one of the driving forces supporting the positive development of the industry;
After TGE, we Long Web3 people have become the 'locked-up retail investors' with the least voice.


📉 About myself:

The fund I manage, Geekcartel, has paper revenue currently outperforming over 90% of similar funds. As of the end of March, the yield was less than 5 times. This is mainly because our fund management scale is not large, and we are cautious in our approach. I'm still very glad we judged during the fundraising period that there aren't many investment targets with long-term survival potential in this market; 'Better not invest than to invest recklessly!' is one of our fund's investment principles.

But even so, I have decided not to initiate the second phase of fundraising for now.

Because I am not sure what kind of answer I can provide to my LPs when the current 5x yield unlocks for me.

However, investing is still something I really enjoy. Judging cyclical market trends, assessing people, witnessing the growth of excellent entrepreneurs, and sharing both glory and shame is a very rewarding life experience. Investment is something I will always do.


🧨 What is really happening in the primary market:

Investment funds have gone from kneeling to invest in excellent projects two years ago to now begging for some early liquidity.

Connecting resources, listing channels, market services, MM services, etc., with almost no funds taking action today, everyone is post-investment. They can provide you with everything within their capabilities, as long as the project parties can spare a little pre-emptive liquidity.

Every VC is writing their own (survival manual)

Funds making decisions like ABCDE are not rare; they just don't publish it externally. The situation for raising new funds is also not optimistic, and the primary market is basically in a semi-suspended state except for funds with industrial discourse power.
From a group of entrepreneurs who originally wanted to change web3 eventually researching MEME, to investment funds only daring to invest in projects they can strongly control (such as incubation).

When investors exit, when the market is left with only 'fast runners' and projects that do not require product technology, when true innovators with dreams cannot survive, the market will usher in a real bear market.

In this dilemma, we primary investors are like ferrymen repeatedly drowning between capital logic and human instinct.

But I am not a pessimist. Having seen many storms, I always believe that every round of cold waves hides new opening opportunities.

In the next article, I want to talk about the “new opportunities” I see in the primary market.

👀 Stay tuned.