VC Partner: Early-stage crypto funding tightens, VCs take the lead in project selection

According to Tom Dunleavy, Head of Venture Capital at Varys Capital, the fundraising environment for cryptocurrency startups has undergone significant changes over the past six months. Venture capital (VC) firms now only need capital to gain access to deal flow—high-quality projects are actively seeking investment, and funding demand has reached an all-time high. Most VC firms have either exhausted their capital, shifted focus to later-stage rounds, or failed to raise new funds, leaving fewer than 20 firms actually capable of investing at the earliest stages (Pre-Seed/Seed). The fundraising cycle for startups has lengthened from two to three weeks to two to three months, and companies lacking innovation or merely copying market trends struggle to secure lead or follow-on investments. VC firms now enjoy more time to conduct thorough due diligence when evaluating projects. Dunleavy believes that 2025 and 2026 will represent a historic window for VC firms that remain committed and resilient.