Is What You See Genuine Venture Capital or PseudoVenture Capital Placeholder Founder Calls Out Public Ignorance

In the bearish market conditions of the past six months, many people have blamed venture capital (VC) firms for the downturn. They claim that these firms have invested too much in overvalued projects with no practical application, unlocking tokens without any underlying value. They believe that this irresponsible attitude has worsened the market. We can perhaps see signs of this in the trend of tokens listed on Binance. In June of this year, Binance was criticized by the community for listing several high-valued VC tokens. However, recently, Binance has continuously listed many TON blockchain-related and meme tokens, indicating a change in the market’s preference for cryptocurrencies.

To defend the reputation of VC firms, Chris Burniske, co-founder of well-known VC firm Placeholder, speaks up. He points out that what the community often sees is “pseudo-VC,” as many truly high-quality VC firms are not active on social media platforms like Twitter in the cryptocurrency industry.

As for what constitutes a high-quality VC firm, Burniske says that such firms enable startups to innovate without taking on debt or needing to provide their own startup capital. High-quality VC firms help startups progress in areas such as background, abilities, or experience.

He also states that the real problem lies in the fact that high-quality VC firms are often smeared by pseudo-VC. These pseudo-VCs only want to enter the private market and accelerate liquidity acquisition. They do not provide any substantial help to startups and only care about maximizing their own profits. Burniske strongly urges the public not to confuse the two.

Burniske says that the pseudo-VCs he refers to are not respected by startups, and they usually struggle to sustain their operations for a long time. They also have little to no substantial influence because they do not provide any value (or negative value).

However, the community often struggles to obtain this industry information from Twitter, so they tend to equate high-quality VC firms with pseudo-VC and accuse them of disrupting the market.

Burniske states, “Blaming VC firms is very typical, which shows that people have little understanding of high-quality VC, and these narratives are often fueled by those who intentionally mislead the audience.”

The author agrees with this to some extent. In June, during the market downturn, many KOLs indeed used the most sensational words on Twitter to accuse VC firms. However, the author believes that things are often not entirely biased towards one extreme. Although VC firms in a broad sense have indeed caused significant problems in the market, the progress of the industry cannot be separated from the resources provided by these VC firms to early-stage startups. Those KOLs who push the crowd to extremes are more or less attracting public emotions.

And we can also see VC firms like a16z, which have crypto startups accelerators, not only providing funding but also offering assistance in technology and operations. Perhaps the trend of “blaming VC firms” has brought positive effects to the industry by gradually eliminating low-quality VC firms that are only focused on speculation.