VCs believe that the challenges of this round of investment "hell difficulty" mainly come from the following 6 aspects:
Valuation bubble and market turmoil: In early 2022, affected by the dollar's water dividend, North American VC institutions successfully raised huge funds, pushing the primary market valuation to an irrational level. Subsequently, FTX's thunderbolt, Binance CZ and other events occurred one after another, seriously disrupting the market's financing and listing rhythm, further exacerbating market uncertainty.
Lack of industry narratives and applications: Although technical narratives and new asset issuance narratives emerge in an endless stream, the market generally lacks application narratives that can attract users and generate practical benefits. This leads investors to be skeptical about the long-term value of the project, which in turn affects their investment decisions.
Limited capital flow and stock market: The market as a whole is in a stock state, and capital flow is limited. Although there is an inflow of ETFs, it has not flowed into the copycat market, which directly affects the market's activity and the project's financing ability.
The dilemma of altcoins and VC coins: The price of altcoins has fallen sharply, and VC coins are facing the dilemma of unlocking a large amount of funds but no incremental funds to take over, which has led to the continuous decline of these currencies, further undermining market confidence.
Funding concentration and exit difficulty: The funding end is highly concentrated in a few top CEXs, and most non-hot projects cannot meet the listing requirements of CEXs and are difficult to gain the favor of investment institutions, which in turn increases the difficulty of project exit.
Lack of hot spots and hot money deviation: The current market lacks new hot spots to carry hot money. At the same time, when the market's attention is focused on riskier memes, it further exacerbates the market's speculative atmosphere and volatility.
