.coinfund_io partner pakman talked to CoinDesk about the FTX collapse, the 2023 investment landscape and how the industry can move past this year’s scandals. BrandyBetz reports
for a seed investments fund, indicating the firm has continued to raise money despite the macro environment.
“We were nervous even at the beginning of this year, and getting more nervous as the year went on given the macro environment and the stuff happening in crypto.” Pakman said of CoinFund’s own fundraising efforts. “But we’re very fortunate that we have LPs that actually prefer to see us investing in this pricing environment.”
Bear markets can benefit venture capital firms because shakier markets lead to lower valuations and more attractive entry points for potential investorsPakman thinks crypto investments will continue focusing on areas that were in progress before all of the turbulence, including layer 1 and layer 2 blockchains, NFTs, gaming and the Web3 development stack that’s maturing enough to entice Web2 developers to make the jump.
"The FTX and Celsius stuff – and all the other failures – might be creating renewed interest in productizing DeFi in a way that’s easier to access by both institutions and individuals. Because DeFi is not super easy to access,” said Pakman.“How do we get out of this loop of bad events happen – largely because of a human-ledmistake – that exposes all sorts of other risky behaviors that lead to this domino effect of more companies failing?” asked Pakman.
Companies should focus on risk management and the conservative use of leverage, he said, though startups should try to avoid using leverage at all.“When you have some success, you don’t want to then bring in a bunch of extra risk by using leverage or doing other stupid things because it’s hard enough to get to a success scenario,” Pakman said. “Retire risk as you move on, don’t create more.”
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