How to Fundraise in Web3: A Modern Guide to Securing Investment

Web3 fundraising has evolved significantly since the ICO boom of 2017. While the early days were marked by hype-driven investment, today’s investors demand more than just a white paper and a vision. To succeed in the current Web3 fundraising landscape, startups need a solid project identity, a strategic business model, and, most importantly, clear market demand. This article will guide you through the most effective fundraising methods for Web3 projects and provide insights into how to stand out in a highly competitive market.

Key Takeaways

Evolving Investor Expectations

Web3 fundraising has shifted. Investors now seek projects with strong business models, well-defined tokenomics, and real market validation. A solid product or MVP (minimum viable product) is no longer optional—it’s essential to secure funding.

Strategic Investors Matter

It's not just about raising money; it’s about finding the right partners. Strategic investors who bring more than capital—such as mentorship, industry connections, and market insight—can make all the difference in helping a Web3 startup scale.

Multiple Funding Options

Various funding routes exist, each with its pros and cons. You can choose from venture capital (VC), angel investors, grants, ICOs, and crowdfunding depending on your project's stage and goals.

Knowing When to Pivot

If traction is low and your resources are running out, it’s critical to reassess your approach. If your project is not gaining traction, consider pivoting to a new direction rather than exhausting your resources chasing dead ends.

The ICO Boom: A Cautionary Tale

If you were around during the ICO boom of 2017, you might remember companies like Centra Tech—a Miami-based startup that raised over $32 million for a cryptocurrency-based debit card, promising partnerships with major payment networks like Visa and Mastercard. The only problem? Centra Tech had no actual product and no partnerships. Within a year, the founders were arrested, and the project was exposed as a scam.

This event, along with many others from the ICO boom, serves as a cautionary tale. In 2017, more than 435 ICOs raised around $5.6 billion, but many of them collapsed after just a few months. Reports indicated that over 80% of ICO projects that year were scams, leaving investors burned.

The good news? The Web3 fundraising landscape has matured. While ICOs remain a viable fundraising method, they are now subject to increased scrutiny and regulation, and investors expect much more than just a well-written white paper.

How to Fundraise in Web3 Today

In today’s Web3 ecosystem, investors are far more discerning. They expect to see a fully realized concept, clear market validation, and a detailed roadmap before they consider funding your project. Below are the most popular ways to raise funds for Web3 projects in 2025.

1. Incubators and Accelerators

Incubators and accelerators provide crucial support for early-stage Web3 startups. These programs typically offer funding, mentorship, resources, and networking opportunities to help entrepreneurs move from the ideation phase to market-ready products.

• Incubators focus on startups that are in the ideation phase, providing resources to build an MVP.

• Accelerators work with projects that already have an MVP and offer mentorship and funding to help scale rapidly. Many accelerators conclude with a Demo Day, where startups pitch their projects to a room full of investors.

Notable programs include:

• Outlier Ventures Base Camp: A 13-week accelerator for Web3 and crypto startups.

• Alliance: Offers daily mentorship and flexible funding.

• Antler: A global early-stage investor offering a 26-week startup program.

• Brinc: A 10-week accelerator program with funding and mentorship.

2. Venture Capital (VC) Funding

Venture capital remains one of the most reliable ways for Web3 startups to secure significant funding. However, VCs are more selective than ever, requiring strong business models, sustainable tokenomics, and clear legal frameworks before investing.

• Finding the Right Web3 VC: Not all VCs specialize in blockchain projects, so it’s crucial to find investors who have experience in Web3, whether it’s in DeFi, NFTs, or other blockchain-related fields.

• Structuring VC Deals: Web3 deals often involve a combination of equity and tokens. Understanding how to negotiate the balance between equity and token allocation is key to structuring a fair deal. Be sure to discuss:

• Investment amount

• Equity vs. tokens

• Vesting schedules (to prevent early sell-offs)

• Governance rights (VC involvement in decision-making)

VCs will conduct due diligence before investing, scrutinizing your company registration, tokenomics model, financials, and roadmap. Make sure your project is well-documented and ready for scrutiny.

3. Angel Investors

Angel investors—high-net-worth individuals who invest their personal capital—can offer more flexibility than VCs. They tend to be more willing to take risks on early-stage projects, especially if they have a personal connection to the industry or technology.

• Where to Find Angel Investors: Key events like Token2049, ETHDenver, and Consensus are great places to meet angel investors. Online platforms like Telegram and Web3 X also host private groups where investors are actively looking for the next big opportunity.

Angel investors can offer valuable mentorship and connections, often providing much more than just financial support.

4. Grants and Ecosystem Funds

Many blockchain networks offer grants to projects that contribute to their ecosystems. These grants are often non-dilutive (meaning you don’t have to give up equity or tokens) and can provide valuable funding to help your project grow.

Some notable grant programs include:

• Rootstock: Offers $2.5 million quarterly to developers building on the Bitcoin blockchain.

• Starknet: Provides seed grants to early-stage teams with an MVP.

To secure a grant, ensure your project aligns with the grantor’s mission, demonstrates a clear roadmap, and presents a sustainable business model.

5. ICOs and Token Sales

Despite the regulatory scrutiny they face, ICOs and token sales are still an option for Web3 fundraising. ICOs involve creating and distributing new cryptocurrency tokens, which investors purchase in exchange for established cryptocurrencies like Bitcoin or Ether.

However, ICOs are highly regulated in many regions. In the United States, for example, the Securities and Exchange Commission (SEC) views many ICO tokens as securities, so it’s essential to ensure compliance with local laws and regulations.

To make your ICO successful:

• Develop a clear tokenomics model that defines your token’s utility, supply, and distribution.

• Set realistic fundraising goals to avoid overcapitalization.

• Build trust by engaging with your community and providing regular updates.

6. Crowdfunding

If you’re just starting out and lack the resources to attend investor events or connect with angel investors, Web3 crowdfunding platforms can provide an alternative way to raise funds. Platforms like Gitcoin Grants focus on public goods and open-source blockchain projects, while UFANDAO.com offers a platform for peer-to-peer donations.

Crowdfunding may not raise huge amounts of capital, but it can help you get started, especially if you're in the early stages of development.

Navigating the Future of Web3 Fundraising

Web3 fundraising has come a long way since the ICO boom of 2017. Today’s investors are more cautious, and the regulatory landscape is evolving. Startups that succeed in securing funding are those with strong, well-documented projects and clear market validation.

To increase your chances of success:

• Develop a strong project identity.

• Ensure your tokenomics model is clear and sustainable.

• Target the right investors—those who offer not just capital, but also strategic support.

If one fundraising method doesn’t work, don’t be afraid to pivot. Web3 startups often need to adapt, refine, and explore different funding avenues to achieve their goals. Ultimately, the most successful projects will be those that not only secure funding but also build lasting partnerships with investors who help them scale and succeed in the competitive Web3 space.

Good luck with your fundraising journey!