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Crypto startup valuations face tough market conditions, VC expert warns

Author: Content Editor
The managing partner of hash3xyz, Hootie Rashidifard, warns that misjudging crypto startup valuations can lead to wasted time and unfavorable fundraising outcomes. The sentiment in the crypto venture capital market is currently at its lowest point since late 2022, with declining valuations and investor caution. Rashidifard emphasizes the importance of establishing a realistic valuation prior to engaging with potential investors to avoid wasting time and resources. Founders who overestimate their startup's valuation may have to lower their expectations, resulting in suboptimal terms and less favorable partnerships. Rashidifard suggests a more flexible approach, either setting the valuation lower or letting the market determine it. He also advises against waiting for a more favorable fundraising environment, as market conditions may not improve for a long time. Additionally, there has been a debate in the industry about the significant price declines of VC-backed tokens over the past few months. However, Dragonfly Capital's Haseeb Qureshi argues that the drops are more related to broader market dynamics rather than venture capital manipulation.

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