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Crypto Startups Seek 50-80x Revenue Valuations, 10T Holdings Rejects 200 Deals

Coin WorldWednesday, May 14, 2025 9:21 pm ET

1min read

Dan Tapiero, CEO of 10T Holdings, recently addressed the Toronto Consensus conference, highlighting a concerning trend in the cryptocurrency startup landscape. He noted that many of these startups are seeking valuations that far exceed their actual revenue, which poses significant challenges for venture capital firms aiming to achieve satisfactory returns. Tapiero expressed his bewilderment at founders expecting valuations of 50 to 80 times their revenue, a practice he believes hinders liquidity providers.

Tapiero’s firm, 10T Holdings, has been particularly selective in its investment decisions, rejecting over 200 opportunities due to perceived overvaluation. This stringent approach includes turning down well-known names like FTX and BlockFi. The firm’s criteria for investment are rigorous, requiring enterprise valuations of at least 4-5 billion USD and a market-sales ratio not exceeding 10 times. Despite these concerns, the cryptocurrency venture capital sector continues to thrive, with first-quarter transactions surpassing 6 billion USD, according to data from PitchBook.

During the conference, Dan Morehead, CEO of Pantera Capital, introduced an innovative investment model called “Equity + Token.” This model aims to provide a more balanced approach to investing in cryptocurrency startups. Morehead highlighted that 86% of the projects funded by Pantera Capital are profitable, with 22 of these projects achieving unicorn status. This model suggests a potential shift in how venture capital firms approach investments in the cryptocurrency space, focusing on both equity and token value to mitigate risks associated with overvaluation.

Tapiero’s warnings underscore the need for caution in the cryptocurrency investment landscape. The rapid growth in venture capital funding for cryptocurrency startups, coupled with the high valuations sought by these firms, creates a complex environment for investors. The introduction of the “Equity + Token” model by Pantera Capital offers a potential solution, emphasizing the importance of diversified investment strategies in navigating the challenges posed by overvalued startups. As the cryptocurrency sector continues to evolve, investors and venture capital firms will need to adapt their approaches to ensure sustainable growth and profitability.

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