Crypto Startups Seek 50-80x Revenue Valuations, Venture Capitalists Cautious

Crypto startups are increasingly pricing themselves out of venture capital funding by seeking valuations that far exceed their revenues, according to Dan Tapeiro, the CEO of 10T Holdings, a venture capital firm focused on crypto. Tapeiro highlighted that many founders and CEOs believe they should be raising capital at 50 to 80 times their revenue, making it challenging for venture capitalists to achieve a reasonable return for their liquidity providers.

Tapeiro made these remarks during a panel discussion at the Consensus conference in Toronto on May 14. He noted that 10T Holdings has declined to invest in over 200 companies due to their unrealistic valuations, including now-bankrupt firms like FTX, BlockFi, and Celsius. The firm typically looks for crypto projects with valuations above the $400 million to $500 million range and a valuation-to-revenue ratio of 10x or less.

Venture capitalists generally prefer lower valuations because they offer more upside potential with less risk. Realistic valuations also make follow-on funding rounds more attractive to investors and simplify the exit process. Tapeiro emphasized the importance of valuation, stating that it is a critical factor in determining whether an investment is viable.

Despite Tapeiro’s concerns, crypto startups have continued to attract significant venture capital funding. The total value of crypto venture capital deals rose over 100% quarter-on-quarter to $6 billion in Q1 2025, while the number of deals increased by only 8.8%. This indicates that despite the high valuations, there is still substantial interest from venture capitalists in the crypto space.

Pantera Capital CEO Dan Morehead, who also spoke on the panel, suggested that venture capitalists should diversify their investments by receiving a mix of private equity and tokens when investing in crypto startups. Morehead noted that tokens and private equity have their own advantages and disadvantages, and their values can fluctuate significantly. He advocated for a balanced approach, investing in a wide spectrum of tokens and ventures to mitigate risk and maximize returns.

Pantera Capital has taken a more aggressive investment approach compared to 10T Holdings and has seen considerable success. The firm has achieved a return on 86% of the startups it invested in, with 22 of those reaching unicorn status, meaning they have valuations of $1 billion or more. This success underscores the potential for significant returns in the crypto space, even amidst the challenges posed by high valuations.