Seasoned entrepreneur Kain Warwick has shed light on the pivotal role of meta-narratives in shaping early-stage protocols. In Warwick’s latest X chat with an abundance of his followers, he explored the complex issues related to how the incentives of capital hunters are created. He delved into the closely connected relationship between VCs and retail investors, as well as the continued problems associated with startup companies attempting to raise funds in the early stages of development.
Warwick astutely observed that even the most successful Web 3.0 ventures seeking fresh capital are ensnared by the prevailing meta-narratives. He noted that in the quest to secure substantial funding rounds, teams are compelled to adhere to the dominant meta, as divergence could jeopardize their fundraising endeavors.
Consequently, Warwick highlighted the emergence of “points,” a concept pioneered by Blast, an L2 protocol within the overhyped OP Stack ecosystem, as a natural recourse for teams navigating the competitive landscape of early-stage raises.
From the vantage point of seed investors, Warwick underscores the enduring significance of traditional signals of project traction, such as user base expansion, potential customer acquisition, and engagement metrics on platforms like X and Telegram. These rudimentary indicators serve as barometers for estimating the potential influx of retail token buyers, thereby influencing investment decisions.
Moreover, Warwick elucidated that the infusion of points serves as a strategic mechanism for incentivizing user activity and Total Value Locked (TVL) at minimal cost, thereby enhancing the prospects of securing larger funding rounds. In the realm of crypto fundraising, Warwick contends that seed rounds ranging from $10 million to $50 million in Fully Diluted Valuation (FDV) often yield profitable outcomes for investors. This validates the efficacy of such capital formation strategies.
In offering pragmatic advice to aspiring entrepreneurs, Warwick advocates for the strategic unveiling of retail tokens at valuations between $10 million and $1 billion following multiple rounds of private/seed funding with VCs. By challenging the prevailing anti-retail meta, founders can potentially unlock new avenues for growth, albeit at the risk of encountering resistance from entrenched interests and regulatory scrutiny.
Moreover, according to Warwick, these retroactive airdrops put between 2021 and 2023 served to give a chance to wider public to own a token and as a result increased retail investors’ participation in crypto sphere.
