Top 8 Crypto VC Firms and Funds for 2023
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Venture capital firms across the world are exploring the crypto market for new investment opportunities. In a nutshell, crypto VC firms offer capital and operational assistance to blockchain startups that are behind innovative, disruptive ideas.
In this guide, we discuss the 8 best crypto VC firms. We also explore how crypto VC firms work and why investors should pay attention to them for enhanced market insights.
The Top 8 Best Crypto VC Firms
Here is an overview of the main players in today's crypto VC market:
- Block Labs - Overall Best Crypto VC Firm in 2023
- Pantera Capital - Crypto Investment Firm Offering Multiple VC Funds
- Coinbase Ventures - Venture Capitalist With a Portfolio of 250+ Crypto Projects
- Binance Labs - Investment Arm of the Binance Blockchain Ecosystem
- Sequoia - Leading American Venture Capital Firm With Crypto Investments
- FBG Capital - Blockchain Investment Firm Operating in the Asia-Pacific Region
- Digital Currency Group - Crypto VC Fund Investing in Blockchain Protocols and Tokens
- Polychain Capital - VC Firm With Actively Managed Blockchain Digital Assets
In the following sections, we provide reviews of the best crypto venture capital firms, highlighting their top investments.
A Closer Look at the Best Crypto Venture Capital Firms
At first glance, it might appear as if crypto VCs operate independently from retail investors. After all, venture capitalist firms are investing in early-stage projects that might not even make it to the market. However, VC firms pour countless hours of research into finding viable cryptos with the most potential. And furthermore, the portfolio of crypto VC firms is publicly available.
As such, this offers a great opportunity for retail investors to spot the best upcoming crypto projects in the market. With this in mind, we will now explore the best crypto VC firms that are funding blockchain startups in 2023.
1. Block Labs - Overall Best Crypto VC Firm to Invest in 2023
Block Labs is a crypto VC firm that invests in companies operating in the web3 space. It is one of the few venture capitalists that offer funding for crypto projects at all levels of their investment cycle.
Crypto entrepreneurs can seek capital assistance from Block Labs whether they are just starting out or looking to expand their business with a partnership. Moreover, this VC will also help crypto startups with the process of building and implementing a solid business plan.
Perhaps, the biggest strength of Block Labs is its strong marketing team. With over 200+ experts, Block Labs ensures that crypto startups gain exposure in their specific target markets - through promotions, interviews, and more.
According to the Block Labs website, this VC firm has helped crypto projects raise more than $50 million. One of its top investments of 2022 was Tamadoge, an upcoming metaverse NFT project with an array of play-to-earn games.
Tamadoge raised more than $19 million via its presale and is now one of the top trending cryptos of 2023. In addition to Tamadoge, Block Labs is also behind the success of many other crypto platforms and NFT marketplaces.
But don't just take our word for it, take a look at this Tamadoge price prediction video by the popular YouTuber Jacob Crypto Bury.
The long list includes CryptoNews, CryptoPR, LawBEAM, NFT Launchpad, and blockchain development company Tech Alchemy. Over the years this VC firm has built a diverse portfolio of startups in multiple sectors related to the crypto industry. As such, Block Labs is a clear winner on our list of the best crypto VC firms.
2. Pantera Capital - Crypto Investment Firm Offering Multiple VC Funds
While Block Labs caters primarily to crypto startups and entrepreneurs, Pantera Capital also offers exposure for retail investors by providing VC funds. Pantera Capital is the first US-based asset manager to invest exclusively in the blockchain industry.
This VC firm was founded in 2003; however, it shifted its focus to the crypto market only in 2013. In other words, Pantera has the first-mover advantage in this space and offers retail investors a spectrum of crypto VC funds. Pantera offers five different crypto VC funds for retail investors.
These funds offer exposure to blockchain infrastructure companies, private token sales, actively traded digital assets, and the global price of Bitcoin. Pantera also has a VC fund that gives exposure to private equity investments in promising early-stage crypto projects.
However, bear in mind that these funds have a minimum investment requirement ranging from $100,000 to $1 million. Some of the top investments in Pantera Capital's portfolio include 1inch, Abra, Coinbase, Filecoin, Polkadot, and Ripple.
At the time of writing, Pantera Capital manages assets worth $4.5 billion.
3. Coinbase Ventures - Venture Capitalist With a Portfolio of 250+ Crypto Projects
Coinbase is a name familiar to all crypto investors. However, not everyone knows that this world-famous crypto ecosystem also has a separate investment division named Coinbase Ventures. This VC was founded in 2018 with a mission to finance promising early-stage crypto projects.
Coinbase Ventures has invested in more than 250 crypto startups over the past four years. Notably, Coinbase's portfolio has some of the leading crypto projects of today.
For instance, Coinbase Ventures invested in Polygon during its seed round. At that time, MATIC tokens were priced at around $0.0007 per coin. Fast forward to 2023, Polygon is trading at around $0.80 at the time of writing.
Similarly, Coinbase Ventures has also participated in the seed rounds of Yuga Labs, Aptos, CoinsenSys, and many other popular crypto projects of today. It also has stakes in OpenSea, ImmutableX, Nifty Chat, Rarible, Syndicate, and many others.
4. Binance Labs - Investment Arm of the Binance Blockchain Ecosystem
Binance is one of the world's leading blockchain platforms with a wide range of products, including the largest digital asset exchange. The platform aims to be a complete infrastructure provider in the crypto space.
As such, it doesn't come as a surprise that Binance also has an investment arm dedicated to supporting innovative crypto projects. Binance Labs supports blockchain entrepreneurs, startups, and communities with all resources necessary to help grow the blockchain ecosystem.
Binance Labs was set up in 2018, and since then, the crypto investment firm has funded more than 200 projects across 25 countries. Furthermore, Binance Labs is also one of the largest crypto VCs in the industry, with $7.5 billion of assets under management.
The VC firm's portfolio includes many famous crypto brands such as Polygon, BitTorrent, 1inch, and Travala.com. Binance Labs also runs an incubation program every year to handpick crypto startups across the DeFi, NFT, and metaverse sectors.
5. Sequoia - Leading American Venture Capital Firm With Crypto Investments
Sequoia is one of the most well-established venture capital firms in the US. It invests not only in the crypto market but also in tech-related companies operating in other sectors. The company has operations in the US, Southeast Asia, India, China, Israel, and Europe.
Sequoia specializes in seed-stage, early-stage, and growth-stage investments. Although Sequoia has been around since 1972, the VC firm started its active expansion in the crypto sphere only in 2022.
That said, it has already raised around $600 million for its first new crypto VC fund. It has also invested in more than 25 projects, including Polygon, Fireblocks, and Kuber.
Additionally, Sequoia Capital India has also announced the launch of two new funds. The first is a $2 billion venture that will focus on early-stage crypto startups in India. The second one, worth $850 million, will be used to invest in young companies in Southeast Asia.
6. FBG Capital - Blockchain Investment Firm Operating in the Asia-Pacific Region
FBG Capital was founded in 2015 and is based out of China. The VC firm invests primarily in early-stage blockchain startups. FBG Capital's portfolio consists of over 60 holdings. FBG Capital is one of the early backers of leading crypto projects such as Filecoin, Tezos, Maple, and others.
FBG Capital is spearheaded by Vincent Zhou, who is an early investor in a broad range of blockchain companies and projects. He is also widely considered to be one of the most well-connected crypto VC funds managers in Asia.
Given Zhou's connection in the blockchain industry and FBG Capital's proven track record, investors might want to check out the firm's portfolio when choosing the best future cryptocurrency projects.
7. Digital Currency Group - Crypto VC Fund Investing in Blockchain Protocols and Tokens
Founded in 2015, Digital Currency Group is a crypto VC firm that mainly invests in fintech startups and blockchain technology. It is one of the largest crypto investment firms with holdings in 294 startups.
Its portfolio consists of Coinbase, Circle, Elemental, ZCash, The Graph, and more. Apart from investing in upcoming crypto startups, Digital Currency Group also participates in selected private token sales.
So far, the venture capitalist firm has investments in Bitcoin, Ethereum, Ethereum Classic, Decentraland, Horizen, Livepeer, and ZCash. In addition to this, DCG also has indirect exposure to other cryptocurrencies via its subsidiary companies.
8. Polychain Capital - VC Firm With Actively Managed Blockchain Digital Assets
Polychain Capital's founder Olaf Carlson was the very first employee of Coinbase. Carlson left Coinbase in 2016 to set up his own venture capital firm based out of San Francisco. Polychain Capital started with $5 million from thirty investors.
This crypto venture firm focuses on generating exceptional returns for investors through an actively managed portfolio of blockchain-related assets. Over the years, Polychain Capital has invested in many interesting crypto projects - which include Polygon and Compound.
To date, Polychain Capital's portfolio comprises 177 crypto startups, which includes 97 lead investments. It's estimated that this crypto VC firm has around $6.6 billion in assets under management.
What are Crypto VC Firms?
In the general sense, crypto VC firms are no different from traditional venture capitalists. The only exception is that crypto VC firms invest in early-stage startups that are focused on the blockchain sector.
Venture capitalists have funded new projects since the early days of the crypto market. However, over the past couple of years, the amount of money being poured into the blockchain sector has increased significantly.
In 2020, crypto VC firms made investments worth around $5.5 billion. By 2021, this figure surged by 450% - as $33 billion was invested in blockchain startups during the year. According to recent estimates, crypto-focused startups attracted $14.2 billion in VC funding during the first half of 2022.
VC fund managers also spend a considerable amount of time reviewing and researching thousands of projects to assess their growth potential. Additionally, crypto capital venture firms diversify their investments, in full appreciation that many projects will fail to succeed.
Moreover, to ensure the success of their investments, the best crypto VC firms have started offering additional services to crypto entrepreneurs. For instance, today, the best crypto venture capital firms have dedicated teams that help startups build their business model, work on marketing, and find partnerships.
Now that we have covered the appeal of crypto VC firms for startups, let us discuss what they offer for retail investors.
In most cases, crypto VCs raise funds from a pool of investors. Sometimes, these firms also offer access to VC funds to retail investors - however, the minimum stake required can be substantially high, often more than $100,000.
This means that the majority of crypto VC funds might be out of reach for casual investors. Nevertheless, web3 enthusiasts can still explore the portfolios of VC funds to learn about the crypto investment trends.
Additionally, retail investors can also take advantage of extensive research done by VC firms to identify the best cryptocurrencies to buy.
Crypto VC Funds - How do They Work?
In simple terms, the best crypto VC firms find emerging startups with high growth potential, invest in them, and work with the project to help them succeed.
A crypto startup goes through multiple stages of funding - which we explain in more detail in the subsequent sections:
This is the first stage of crypto VC funding. In the 'seed' stage, founders are looking to get their company off the ground. This is where they work out the development plan, hire the team, and develop the product.
Most crypto venture firms are looking to invest at this stage in order to secure an ownership stake in the project. However, investing in crypto startups in the seed stage is also extremely risky.
Series A Funding
By the next stage, called 'series A', crypto startups will already have a working product and have shown progress with their business model.
Moreover, the company will have also demonstrated the potential to grow and generate revenue. At this point, the risk is lower, at least when compared to the seed stage.
Series B and C Funding
Series B and C funding are sought out by crypto companies hoping to take the business to the next level. Crypto companies undergoing 'series B' funding are often well-established and successful.
On the other hand, companies that raise 'series C' funding are looking to expand their portfolio. For instance, they might be looking for additional capital to develop new products, expand new markets, or even acquire another company.
VC firms typically exit their investments once the company goes public. In the case of cryptocurrencies, this might happen when the project launches its token on an exchange.
Alternatively, the VC firm might also exit after it has secured a deal in the secondary market - by selling its equity in the company to someone else.
How do Crypto VC Firms Support Blockchain Startups?
Unlike traditional investment mechanisms, VC investors do not just offer financial support for crypto startups.
These days, top crypto VC firms provide active assistance to crypto companies over the course of several years - offering to step in, should the startup face any hurdles along its roadmap journey.
- VC firms such as Block Labs add value to crypto startups through their business acumen and marketing expertise.
- Similarly, VCs like Coinbase Ventures share their managerial expertise and provide marketing and development assistance to projects.
- Some of the best crypto VC firms also host networking events for entrepreneurs so that they can meet other investors and enter into partnerships.
- Moreover, VC firms are coming up with creative ways to drive innovation in the crypto space and empower entrepreneurs.
For instance, as we noted above, Binance Labs conducts an incubation program every year. The VC firm receives hundreds of applications for each season, out of which it packs a handful. The finalists are offered tailored solutions to help them accomplish their goals.
In addition to this, Binance Labs also provides continuous support after the incubation program ends.
In other words, today, with the help of VC firms, crypto startups can get any type of support they want during any stage of their business lifecycle. By partnering with one of the best crypto VC firms - Block Labs, blockchain startups can benefit from financial as well as operational assistance.
How We Picked the Best Crypto VC Funds
As we have already established, crypto VC firms have their own appeal to both entrepreneurs and investors.
When picking the best web3 VC funds for this comparison page, we looked at the following factors:
- The venture capital firm's history, including previous success cases
- The total worth of assets under management
- The type of projects they support
- The team behind the VC firm
- The types of services offered - such as financial assistance and operational support
Investors hoping to find the best upcoming ICOs via the portfolio of VC funds should always remember one important aspect - crypto venture capitalists take high risks when funding a new project.
There is no way of knowing which crypto startups will succeed or fail. In fact, the lion's share of crypto startups do not even make it to the series A funding stage. Moreover, the crypto market is also known for its extreme volatility.
Therefore, if investors are trying to pick the top cryptos to watch based on a VC firm's holdings, retail traders should proceed with caution.
This guide has offered a comprehensive overview of what crypto VC funds are and how they operate. We have also discussed how crypto entrepreneurs and investors can benefit from VC funds.
After considering the best crypto VC firms in the market, we found that a selection of companies stand out due to the level of support they offer to blockchain startups.
At the top of this list is Block Labs. This leading VC firm is behind popular crypto projects such as Tamadoge.
Apart from offering capital assistance, Block Labs also supports crypto entrepreneurs with strategic development and marketing.
What do crypto VC firms do?
A crypto venture capitalist, or VC, is a private equity investor that provides capital to blockchain startups that have high growth potential. Some of the best crypto VC firms also collaborate with startups, offering them all necessary resources, including access to highly experienced legal and marketing teams.
Which are the best crypto VC firms?
The leading crypto VC firms in the market today are Block Labs, Coinbase Ventures, Pantera Capital, Binance Labs, and Digital Crypto Marketing. Block Labs, in particular, is a great choice for crypto startups as the firm not only offers funding but can also help the project gain exposure in the market.
What services are offered by crypto VC funds?
Crypto VCs no longer position themselves exclusively as silent partners of blockchain startups. Instead, many take an active role, offering startups guidance and resources. This includes operational support, token launches, promotions, campaigns, and even legal support.