According to Cointelegraph, venture capital funding for the crypto space has significantly declined in 2023, with Q1 and Q2 seeing around $2.6 billion and $2.1 billion worth of crypto VC deals, respectively. This is a stark contrast to 2022, which saw a combined $20.3 billion flow into the space through VC funding in the first two quarters. In an interview with Cointelegraph, Tony Cheng, a partner at crypto investment firm Foresight Ventures, discussed the lack of new innovations driving venture capital firms away from the space and offered advice for founders on how to survive the bear market.

Cheng believes that most of the narratives, such as layer-2 solutions, zero-knowledge, and nonfungible tokens (NFTs), have 'largely played out' and 'kind of died down' with the lack of trading volume on exchanges and in decentralized finance (DeFi). He attributes the lack of confidence in the space to the absence of new innovation. Despite the current situation, Cheng remains optimistic that things can turn around with a better macro landscape and increased enthusiasm for the next crypto cycle.

When asked about founders accepting funding offers with less favorable terms, Cheng emphasized the importance of survival. He advised founders lacking capital and runway to take as much funding as they can get, as it might not be available in the near future. In the context of the bear market, Cheng suggested that companies should prioritize profitability over growth at all costs, with survival being the number one priority.