Firm Plans To Spend $55M In Web3

Vessel Capital, a venture capital firm, declares that it has $55 million to invest in Web3 infrastructure and applications. In particular, the firm wants to fund fresh web3 entrepreneurs.

“We want to meet new founders who might not already be in our network,” Vessel Capital co-founder, Mirza Uddin states.

It’s Not Just About The Money

According to the recent report, Vessel Capital intends to allocate the funds in Web3 over a span of five years. It hints at the possibility of further expanding that capital pool in the future.

Uddin intends to find founders that he can work with from the beginning to grow their companies. The primary focus of the $55 million fund will be on backing “application-specific infrastructure,” while remaining open to considering other areas as well.

He believes that forging a relationship between a VC who has a grasp of web3, and a startup, from the outset, is the road to success.

Uddin expresses that VCs who don’t understand web3 can’t properly help many startups with great ideas. “Oftentimes, [VCs] don’t have expertise in the things they’re investing in,” he states.

According to Uddin, the secret to a successful VC relationship with a startup is the ability to share knowledge and insights:

“The world has enough VCs, but what’s actually missing is actual guidance and advice. Most times you’ll get a nice check, a pretty logo on your website, but other than that VCs don’t help much aside from intros from time to time.”

He is particularly interested in partnering with fresh founders in the industry. He explains that this can prove to be a more profitable partnership for VCs too.

“A lot of giant funds are getting raises, but the VCs themselves don’t have a lot of skin in the game when it comes to using their own capital,” Uddin states.

Furthermore, Uddin highlights the significant expansion in the web3 industry. He alludes to the firm’s plans to venture into funding opportunities beyond the United States.

“Crypto has become more global, so it’s not the same circle and group you might have seen in 2018-2020, and we want to be able to help more people,” he declares.

Recent VC Funding In The Web3 Sector

In recent times, many believe that the prolonged crypto winter might be influencing web3 funding from venture capitalists.

According to Pitchbook data, crypto and web3 startups raised just $2.32 billion across 456 deals in Q2 2023.

This marks the fifth consecutive quarter of declines since the initial three months of 2022, during which $12.14 billion had been invested. However, the deal count for Q2 2023 saw a minor uptick from the preceding quarter at 439 deals. This rise was attributed to a slight increase in Series A deals.

Rumors are circulating that VCs are also delving into artificial intelligence (AI), potentially leading to reduced funding for web3 and crypto projects.

On May 26, reports indicate that Paradigm is considering an expansion of its investment focus beyond crypto and blockchain to also include AI.