Jack Dorsey On Why VCs Are The Biggest Threat To Crypto And Web3

Jack Dorsey On Why VCs Are The Biggest Threat To Crypto And Web3

Despite crypto and Web3- based projects enjoying increased adoption and unprecedented growth in the past year, a damaging war of sorts is brewing between crypto heads and Venture Capitalists (VC). 

In a battle that has been looming for quite some time now, VCs are increasingly finding themselves in all the bad books with crypto heads who now believe that these Wallstreet-styled entities are out to destroy their hard work.

The latest altercation is coming from Twitter’s Jack Dorsey. It all began with Dorsey justifying a tweet by the genius behind Nomadlist, and over 8 other super-successful startups. The tweet features a cartoon sketch showing VCs supposedly drinking the lion’s share from Ethereum leaving an emancipated retailer only drops.

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VCs Good But Too Dangerous To Crypto Startups

According to another chart shared by the Twitter user, VCs seemed to be the greatest beneficiaries in initial token allocations by some of the leading public blockchains including Solana, Ethereum, Binance among others. Ethereum is leading with 80% of its pre-launch sale or locks drop allocations open to public participation, with a huge percentage supposedly scooped by VCs.

But one would ask, why pick a fight with potential funders? According to Levelsio, VCs are just a clique of “greedy” entities whose only goal is to make a profit with little or no regard for a project’s utility.

 “VCs pump it b4 retail can join. E.g. pre-mining is an example”, he argues. 

And Jack Dorsey couldn’t agree more. In a supportive comeback, the Twitter founder said, “You don’t own “web3.” The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label. Know what you’re getting into…” 

According to Jack “The VCs are the problem *not the people”. The Twitter founder believes that while Venture capitalists are good in that they fund early-stage risky ideas, their capitalist approach towards web 3 projects could pose a grave danger to the development and growth of projects should they continue pulling their pump and dump stunts.

Too Much Control

According to 22-year Wall Street veteran Caitlin Long, the problem with VCs runs deeper than just investing in crypto startups. She argues that early exposure to factors such as pre-mines has always given VCs too much power over a project’s growth.

“Many own pre-mines and hawk them to speculators. Normally it takes 5+ years for traditional VCs to have realizations, but the quick flips cut that average time to realization materially” she says.

The Bottomline

Whereas the issue of VCs is not entirely new with crypto startups increasingly seeking capital injection to take off, Hiro C.E.O Muneeb Ali however believes that Web 3 could change the way users view startup funders. According to him, Web3 opens investing opportunities to more people, which decreases the reliance on traditional VCs and makes the playing field fairer & transparent.

“ It’s not perfect but better than web2,” he says.

Michael Boris
Michael Is A Blockchain Expert And Proficient Crypto Reporter At CoinJot Media With An Academic Degree In Journalism. Disclosure: He owns less than 1 BTC and less than 4 ETH. Contact: [email protected]