How to get financing for Web3.0 startups? | Web3.0 Master Class (Phase 2)

On the evening of May 6th, the second phase of the "Web3.0 Master Class" series of activities hosted by Rhythm BlockBeats was launched on Twitter Space. The guest of this dialogue is the Web3.0 data certificate application Project Galaxy co-founder Harry. In the first week of May, Project Galaxy’s native Token was just listed on mainstream crypto trading platforms such as FTX, Coinbase, and Binance. In January of this year, Project Galaxy received $10 million in financing. The institutional lineup is very eye-catching. Top institutions such as Multicoin, Binance, Cloud Nine, Coinbase, and Alameda all participated.

For Web3.0 entrepreneurs, financing is very important and even determines the start of the project, its duration and subsequent development, etc. Therefore, through the experience of Project Galaxy, we hope to sort out the concerns of entrepreneurs such as "how to obtain financing?", "how to communicate with trading platforms?" and so on.

You are welcome to join Discord< /a>, talk about the development of Web3.0.

Review of the wonderful content of the first issue: 《 Web3 Startup Guide: How to Cold Start and Complete Early User Attraction"

< /p>

Click to listen to the podcast of this issue"Project Galaxy Take you to understand how Web3 entrepreneurs get financing | Web3.0 Master Class (2) "

The following is the exciting content text of this issue of Twitter Space Sort

How to choose an entrepreneurial track

1) Choose your field of expertise

2) Look for a good entry point, and try to avoid doing things that have a long-term vision but have no immediate needs in the short term, otherwise you will face the dilemma that good products will not be produced at the right time.

3) The market environment is very important, and I don't think the current market has reached a very bearish stage. The bear market of 2018-19 is difficult to raise, even $1 million is difficult to raise.

How to increase the visibility of the project in the early stage

1) Attracting multiple project parties to market and do activities together will have a good effect. But this may not be suitable for all projects, and the product characteristics of the project itself need to be considered. The nature of the Project Galaxy project requires cooperation with different projects, which has natural advantages.

2) Harness the power of the community. The biggest difference between Web3.0 and Web2.0 entrepreneurial experience lies in the strength of the community. In the early stage of operation, there are 1-2 thousand core users. Giving them a high sense of participation experience will make these users highly motivated to join the ecological construction. This is also very helpful for raising awareness.

More suitable for infrastructure projects, not necessarily applicable to all projects, the suggestion is to make good use of the power of the community (the biggest difference between web3 entrepreneurship and web2 entrepreneurship) , especially the core users in the early stage of the community, how to write documents together to build a community, etc., can not only increase the popularity but also help the early construction of the project

How to communicate with investment institutions and obtain financing

It will be smoother to chat with investors after you have basic products and data. The first round of financing for Project Galaxy is on the eve of the product release, which is relatively difficult. The second round of financing is smoother, and investors in the first round of financing will continue to invest after the product is released.

Is the Web3.0 project itself more likely to be favored by overseas capital?   

It is the characteristics of Web3.0 that attract overseas capital. There are two reasons for this phenomenon: the epidemic and the location of the user group.

1) Epidemic. Everyone is willing to accept online office work. Before the outbreak, it was necessary to meet and communicate with local investment institutions. After the outbreak, all meetings can be held online, and decisions can also be made online in this way.

2) The location of the user. If the project users are on a global scale, the possibility of obtaining support from overseas institutions will be greater.

The investment pace of Web3.0 will be faster, and institutions will not spend 1-2 months to make decisions like traditional institutions, but most Decisions are made within weeks or even days, which in turn speeds up the evolution process.

The pace of Web3.0 investment slows down

According to the current perceived news and situation, in fact, everyone's investment has begun to slow down.

1) One reason is that the overall market environment is not good

2) Another reason is that the previous investment was too strong, and the overall valuation of this market was overheated in the primary market. Against this backdrop, project parties are still looking for more investment institutions, and the project parties themselves are looking for financing, so their posture is relatively weak.

How to balance different positions of capital and capital? Such as Binance Labs and Solana

This is the difference between Web3.0 and Web2.0. Although the employers (Binance Labs and Solana) may have slightly different positions, they have not yet reached the point where it is either you or me in their ecology. Web3.0 is an ecology that encourages cooperation, not like Web2.0.

Like Tencent and Ali are two very closed systems, they absolutely don’t want to help each other do anything, they don’t want each other to use their own ecology to do anything , but this will not appear in Web3.0. Another very important reason is that Web3.0 is open and non-permissioned, and its infrastructure is to encourage everyone to use other people's ecology, code, and community to do things together. In contrast, the Internet ecology is more closed and beneficial, but the overall structure of Web3 is not suitable for a closed ecology.

How do Web3 entrepreneurs choose the underlying public chain?

This question is really difficult. I don’t know which public chain will win in the end. Harry personally prefers Ethereum.

1) For the project, all chains should be considered, as long as there is ecology and user needs on the chain.

2) From the current situation of the chain and the chain, the user groups are quite different.

Ethereum has a wide audience, but the foundation is that there are more European users;

Solana is supported by American background institutions;

Ecologies such as BSC and Polygon tend to favor more users from second and third world countries.

So when entrepreneurs consider choosing a public chain, they should combine factors such as the technology required by the project, the track where it is located, and the user group.

What is the biggest difference between Web3 entrepreneurship and Web2 entrepreneurship?

1) Community power

2) Natural properties without permission. Products and codes are open, and everyone can build other things on your products. The ecology has reached a great decentralized process on the production side.

3) The topic of Web3.0 industry changes rapidly. But this is not a good thing. As an entrepreneur, you must understand this very clearly, and don’t be too influenced by the sentiment of the market. You need to be clear about what you are doing and how to do it, because it is very possible to do something At a certain time, it was not recognized due to market reasons.

How to use Discord well?

Discord is a second home for Web3.0 products, and it is necessary to communicate with users and listen to opinions through this channel. We will send OAT certificates to some early users. Different users can also get different NFTs and issue airdrops to encourage users to actively participate in product and community building.

As a serial entrepreneur, has your perception of the industry changed in the past 5 years? Is starting a business getting easier?

The market is divided into several time points.

1) Before the epidemic. Before 2020, especially from 2018 to 2020, the market is relatively in a bear market. There are few projects, and few can make good use of ecological resources. For example, there is no good open source information to teach everyone to write contracts, issue NFT, etc.

2) DeFi Summer: Starting in the summer of 2020, YFI, Curve, and Compound will surge. At that time, the Crypto market as a whole was more inclined to overseas markets, represented by the United States and Europe, and then larger capital began to participate in the market. But the number of users is not very large, and more users with funds are playing DeFi products.

3) Rise of NFT: A lot of users are pouring into Crypto. At the same time, the rise of side chains and other public chains, such as Polygon and Soalan, has carried more users. After 2022, many outstanding entrepreneurs of Web2.0 began to pour into Web3.0. And NFT is the most understandable business model for traditional capital or Internet practitioners.

How to communicate with the trading platform?

Although the Token of Project Galaxy was launched on multiple trading platforms within the same day, it actually experienced a lot of communication in the early stage. The most important determining factor is the product. The product already has data and users, so the trading platform is willing to work together to promote this matter.

In addition, it is recommended that entrepreneurs need to make legal preparations as much as possible and make long-term preparations. Especially in terms of US legal compliance, preparations must be made in advance. We also stepped on some pits in the early stage, and spent a lot of time filling this part later.

What special attention should be paid to the operation of Web3.0?

Fortunately, the launch of the project caught up with the rise of the NFT market. Everyone likes the gameplay of products such as our project OAT, which has long been a rigid demand. However, there are still some deficiencies. The preparation of the whole system is not complete, and community issues are not considered enough at important points in time, resulting in voices of dissatisfaction.

Suggestions for Web3.0 Entrepreneurs

Look more at what the market is doing, even if it is not related to what you do, you should learn more and see how others play . Because there are many in this market that are essentially logically interoperable. For domestic entrepreneurs, it is recommended that you communicate more with overseas product teams, entrepreneurial teams, communities or capital. Now overseas capital and overseas settings are still a very important part of Web3.0, even a very dominant part.

Audience Q&A:

Q: Do you have any suggestions for the operation of To C type Web3.0 products?

This type of product depends on whether the product itself solves a certain problem, rather than relying on Token incentives to drive growth.

Q: What preparations should traditional Web 2.0 investment institutions make when entering Web 3.0 investment?

Generally speaking, Web 3.0 investment institutions, especially excellent investment institutions, will provide more added value. It is mainly divided into two aspects: resources and products. In the Web3.0 market, some BD resources cannot be provided by traditional Web2.0 institutions, because these Web3.0 capitals have greater influence in the circle. At the product level, Web 3.0 capital will work with the project side to design token economics, and at the technical level, it will help the project side provide support in smart contract auditing and underlying technology design.

Q: Investing in Tokens in Web3.0 is different from NFTs. The number of NFTs is relatively small, maybe 10,000 or 5,000. So if investment institutions want to invest in NFT projects, should they invest more in this NFT project or the team?

From the result, it is the investment team (project side). My point of view is that 99% of PFP projects will return to zero, and there will be a few or a dozen very high-quality, extremely high-value, and particularly large-scale NFT projects that will remain. But I think the vast majority of NFT projects will still return to zero. Of course, this is my personal opinion. The premise of this view is that it is not productive, just a picture. In fact, the essence of this still depends on the team, not purely on design. The NFT projects that are running now all have very strong operating teams.

Q: In the Web3.0 market, do retail investors or middle-class investors have the opportunity to participate with investment institutions?

This is a very good question. Web3.0 is the first time that retail investors and investors have a more equal role distribution. I understand that everyone’s general point of view is Now investment institutions do have many first-mover advantages. Compared with retail investors, I see that more and more investment DAOs are beginning to form, and many retail investors are involved. In other words, well-known KOLs will gather together to form a fund, and are also actively investing in early Web3.0 projects, which is very difficult to achieve in the traditional world.

Q: How to carry out distributed office management across time zones

How do you want to recruit or form a team? Forming an ecology becomes a negative choice, not your positive recruitment. In the long run, the overall improvement of efficiency will be reverse selection, expanding the selected region from one place to the whole world. This must have a better effect, because you have more choices behind you, and then they are choosing you in the opposite direction instead of you taking the initiative to encircle and suppress them, so the efficiency is not at the same level at all.

In any case, under the management of decentralized office and intelligent hardened organization, it is difficult to guarantee efficiency. As for how to manage the team and implement the office form, I think there may be different choices at different stages.  

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia