Web3 Investment Experts Share Industry Insights and Investment Strategies

The executive director of a globally leading VC firm responsible for investments in the Web3 sector recently accepted a media interview, sharing the firm’s investment strategies, focus areas, and views on the development of the industry.

The organization started laying out its Web3 strategy in 2019 and has currently invested in 16-17 projects, covering infrastructure, middleware, and application layers. Their investment strategy mainly focuses on supporting Chinese entrepreneurs, helping them to develop in the global Web3 market.

The executive director stated that they are optimistic about the long-term potential of the Web3 industry. From a technological and talent perspective, the Web3 market has attracted many excellent engineers and developers to innovate across various fields. The vision of Web3 is to build a value network that allows users to own and quickly exchange digital assets, value, and identity. Currently, Web3 has established some de facto standards globally, which has shown them some signals similar to the early days of the internet.

In terms of the investment stage, although 70% of the institution's investments typically occur in Series A or Series B rounds, they have made some adjustments to accommodate the characteristics of the Web3 industry. Since many Web3 projects are in the early stages and have smaller financing scales, they also engage in seed and pre-seed investments. At the same time, for some projects that have entered the growth stage and require substantial financial support, they also have the capacity to invest.

In terms of specific investment directions, they focus on entry points and infrastructure projects for both individual users and institutional users, such as self-custody wallets, crypto financial services, etc. On the underlying infrastructure side, they are optimistic about the opportunities brought by Ethereum's transition from PoW to PoS and have invested in staking service providers. In addition, they also have layouts in the application layers of DeFi, NFTs, and Gaming.

Regarding the current market environment, the executive director stated that although most industry insiders are optimistic about a market improvement by the end of next year, he believes that market trends are difficult to predict. He advises invested companies to maintain sufficient long-term capital reserves, develop sustainable revenue models, and enhance value capture capabilities to cope with market uncertainties.

In terms of investment rhythm, they hope to maintain relative stability, but bull and bear markets do cause some differences. During a bull market, due to intense competition and numerous projects, the investment pace tends to be fast; in a bear market, however, due diligence can be conducted more rationally, which may actually be more beneficial for the healthy development of the ecosystem.

When discussing the challenges of achieving mass adoption of Web3, he pointed out that the user scale and experience of current Web3 products still have a significant gap compared to Web2. The main reasons include the low acceptance of cryptocurrency payments among users and the underlying infrastructure not being sufficiently developed. He believes that solving these issues will require more time and patience.

For Web2 entrepreneurs entering the Web3 space, he holds a positive attitude. He believes that these entrepreneurs often possess strong technical skills, execution ability, and product awareness. As long as they take the time to understand Web3 users and industry demands, their growth will be rapid.

Finally, in response to the phenomenon of some Web3 entrepreneurs turning to the AI field, he expressed understanding. Web3 is currently facing challenges such as a lack of new application scenarios and slow progress in large-scale adoption, while the AI field has seen some exciting breakthroughs. However, he also reminded entrepreneurs that whether in AI or Web3, there are many challenges and uncertainties at the application level, and they should choose their development direction based on their own interests and abilities.