Founders & Funding: What It Takes to Raise Now | Boston Blockchain Week 2026

Hi everybody. Uh we're going to get started and get into it quick. Um we are here from industry to talk to founders about your fundraising journey and anybody else who's interested in it as well. Um so my name is Sean Sweeney. As Ian said, I'm a GP at Chain Reaction Capital.

I'm also an angel investor in the Boston uh blockchain uh ecosystem and uh so I'm happy to moderate this panel. Um, and like I said, our goal is really just to cover really what it's like to raise money from friends and family all the way through series A and some of the pitfalls that you might run into and things to be thinking about and to get some advice from people who are actually lending money in those uh in those spaces and investing in startups. So, we'll go and uh I guess just do some quick introductions.

Great. Thanks for having me. Uh, my name is Simise. I'm one of the partners at Draper Dragon. Um, we're an early stage frontier fund within the Draper network focused on preed to series A.

Um, excited to be here. Hey everyone, good afternoon. Uh Joe Butram here, CEO of Field Digital. Uh we're a public market M&A roll-up company focusing on uh digital infrastructure, specifically in crypto and digital finance.

Good afternoon everyone. Tom Dunlevy, head of venture various capital. We invest solely in blockchain from preede all the way through early series A.

Good afternoon guys. Rusty Mattv, co- uh managing partner of Current VC. Uh we're probably the outlier here. We do series A and later a lot of skew towards later agnostic. We used to do a lot of blockchain early in like the 201s 2020 early 2020s.

Now kind of more agnostic and generalist. Excellent. So just to kind of set the ladder for what funding is all about um for people who don't know sort of starts with friends and family. Uh you have an idea you're making a prototype a lot of energy probably still have a full-time job doing something. I just met a founder earlier today who has a full-time job as she's starting her her journey.

Um, you're raising from people who are betting on you, uh, not necessarily on the company, not necessarily on the idea. Um, and you know, the quicker you can get to quitting your job and finishing your prototype, the better off you are. Um, moving into preede, you know, now you're with angels, angel networks, micro funds. Uh, oftentimes there's still no real metrics. So what's again being underwritten is really the team and the thesis and and your ability to actually build and do what you say you can do.

Uh once you get to seed, you're actually starting to raise money now from venture. Um they often will do this as a priced round. Um and they're taking a board seat. You're actually generating revenue at this point. Uh and you know your data, your metrics uh start to really matter here.

Real users, real growth. Um and then finally moving into series A, now you're into institutional plus syndicates. Um, now it's a real business. You're really growing. You're generating revenue.

Maybe you're profitable. Maybe you're not. Um, but you know, you're you're talking uh about larger much larger checks and a much faster runway. So, I think we're going to go right into the details first, I guess, with preede and friends and family, keeping in mind that uh the uh the fundraising ecosystem has changed a lot over the years. So, some of these rounds didn't actually exist 10 years ago, and there are plenty of companies that just skip right over a lot of them.

But um you know starting off with Joe, you know when you're investing preede, there's no real metrics to underwrite. So what are you actually looking for?

Yeah, that's a great segue. So going a little deeper in my background, I got my start in the space in earnest throwing the first like Ethereum developer meetups in San Francisco. And from there, we were meeting a lot of the early projects and you know the first meetup we had Dan from MetaMask was presenting. Gav wood came in. we didn't really understand like how do we even invest in these things, you know, and so you could throw out numbers and people would accept them, you know, but the times have changed a lot in which before, you know, it was not as competitive of an ecosystem.

So you had a limited set of investable assets with people that really knew what they were doing. Now it's gotten way more robust, right? And so I think what I look at today is you want to look at it's a founder-driven thesis that I have specifically from my family office days and my angel investing days and you know the strong opinions loosely held thing really makes sense for me. Are they you know founders are somewhat delusional because they're founders you know and so they're really optimistic and so you want to be able to you know see how big they can think while also at the same time think through what are the pitfalls they might experience along the way and then advice you might be able to give them and you know be value add to them as well. um and and really finding those people that are going to be like, "Okay, I'm going to have the grit to really take this as far as it needs to go, but at the same time stay flexible enough um you know to address the product market fit in the everchanging market.

Crypto cycles are months long now, so you have to be really attentive.

Okay. Uh putting it out to anybody uh what is the difference between a team that you fund and a team that you pass on?

I have the mic so I'll start. So I think it's really important particularly in crypto and preede and even seed nowadays is what is your distinct edge as a founder? Is it specifically product based? Is it fundraising based? Is it some edge you have in your network from a previous employer or something you've ran?

You know what is that edge that you have? Because in the earliest stages before revenue or even if you're making a few hundred,000, right, it's really all about that team that you're betting on and the person that has this desire to actually drive this business forward. It's an individual bet on you. So, we have to believe in you and we have to believe in you versus all of the other checks that we could potentially write. So, what is your founder edge and really double down on that until you have tangible metrics you could back up, whether that's revenue or users or, you know, some other really tangible thing a VC can sort of underwrite.

agreed with everything that was just said there by Tom and Joe. I'm a excuse [clears throat] me, I'm a fan of failure, right? I I like I like the skew of past failures and the learnings that a team can glean from that a new founder. While again uh optimistic and uh strong convictions loosely held kind of thing, I love it, but it makes me a little nervous personally. So, I just I like that experience that of failure overcoming, you know, whatever the challenges might have been and and what have they learned from that on the next round.

I don't care if they fail two or three times and in what settings, but I I like failure in that sense, which is a weird thing to say out loud, but that's my my skew.

Yeah, I think just to kind of wrap everything up is founder market fit is why this founder and why are we so lucky to get this deal in front of us? I mean, so many other people would get it. So, what makes this one the edge? I think if their founder is a great fit for the company is is exactly why we would go in at such early time.

Excellent. So then moving on to seed sum means when you strip out the jargon uh what is the proof points that people really want to see at this stage?

I think the how I think about is a few buckets. So the team, the product and and the market and traction. Um so uh as far as the team, how they've been executing because obviously when you invest in the earlier stage, you you look at the team and the founders, but at the seed stages, have they been executing? How well do they know the market they're investing or building in? And then how well have they been really just delivering on what they've said?

Um and something as little as KPIs of what they know, right? When I ask them a question of, you know, what what KPI is this? And they right away know it. That's how you know they eat, sleep, and breathe what they're building. Um, while some companies or some builders might not fully and might not have a full grasp of what they do because they're fragmenting what they do.

So, overall proof points of just execution, delivery, and having some clear path of revenue or growth.

Awesome. Anybody want to add or Okay, good. Um, so do you do you have any kind of rule of thumb about things like how much revenue, what kind of growth rate, uh, how fast are is the company growing that that really helps you determine whether or not you want to talk to a founder? Is there any sort of metrics that you think about directly around that?

So for me, um, with Field Digital, uh, public market company, so we're really based upon public market comps and the equities markets are very forward-looking, right? um they reward growth. Uh they really want fast hyperscaling companies. Um something that you know you can buy a mature company that you know at the end of its life cycle IPOing just to cash out or for us in specifically in crypto if you're in that kind of middle market you want really want to show that hey I'm not just cashing out and leaving but instead like hey I'm coming in here and I'm trying to raise more money in order to capitalize on the next 10x. Um and and that's something that is important for us as the public markets.

They want to see growth companies in crypto not just you know fundamentals that don't make any sense. Okay, cool.

One massively important thing in this space is every metric you have and every benchmark you have is going to rapidly change. So being close to the market is more important than I think almost any other industry. Particularly when there's subverticals emerging every single day, right? If the comps for hyperlquid versus, you know, new products like FOMO, it might be users one day or growth rate another day or social media presence another day. And you really have to understand what the market is valuing and why and what that means to the overall growth and trajectory of the business.

So I don't think there's ever one clear answer right there used to be very clear metric. You know if we were having this panel three or four years ago it would have been okay what are the active addresses and you know what are the unchanged transactions and then people realize that metric could be game so we changed it and you know all of a sudden it's a new metric and it's kind of like eyeballs were in the 2000s. The metrics are always changed. will always be gamed, but you have to understand where you're going and what the business is optimizing for and then really look for those metrics that are defined for that particular subvertical you're looking for.

A lot of good points across the board. I'm probably gonna have to say this again later, but traction can come in so many different forms these days as you know again Tom just mentioned a number of years ago people you know and even before the crypto where people oh you know you have to be at your 20k MR and you know that's like the the starting point in today's world it's so you know looking ahead at almost like who not just your customers but who your next investors are that's also another angle here right are you a strategic for someone in in in a in a corporate type of scenario are you going to get you know traditional financial VCs blockchain VCs on, you know, tokens and, you know, whatever that might look like. So, being able to look ahead and and skew towards that is going to be is also very important. Right now, you can signal traction in so many different ways. It could be a pilot customer.

It could be again, as you know, Tom just mentioned, social presence or airdrop. Like, there's just so many various things that you can effectively manufacture. And I don't mean that necessarily in a bad way, but I think that also just shows the hustle, right? Like, how are you able to get out there? You can get in front of people and have a presence and an awareness of whatever it is your project is doing.

So what about regulation? So what happens when you're talking to a company that's maybe in a gray area with the regulatory picture, you know, specifically like prediction markets and things to that nature? Does that often kill a deal from the beginning or how do you think about regulation? I

think being in crypto, you're always in the gray area. You you're never in a clear path of understanding what's going on. But I think uh for startups, there's two things. Is it their mo or is it a risk to them? And depending on the sector, right?

because it could be a health company and health is extremely regulatory. You need to be very compliant. You need to make sure you have all these different licenses and same with some public market like tokenized stocks, things like that. But I think the beauty of startups is you're able to build and break things and be able to fix it. So if you're able to still operate and build and not spend all your time figuring out what range of regulations you have to go through, as long as you're compliant at a high level, you can figure everything out and cross the bridge when you get there is how I've seen it.

Um, so I wouldn't say it breaks it unless it's a clear, you know, this is an extremely non-compliant uh route.

Yeah, I think there's two different types of challenges here. There's direct illegal activities, which that happens a lot in crypto. So, you have to be aware of those, you know, that happens everywhere, but happens more in our space. But then there's also, you know, activities that may clip your moat, right? So like you brought up prediction markets, you know, 80, you know, 50 to 80% depending on what prediction market you look at is sports related activity.

So if all of a sudden the Supreme Court says, okay, no more sports related activity for these things or you have to get licenses per state, it immediately clips the upside significantly. So you know, if you check the box that it's okay, at least on the not completely legal side, it's really about okay, does this, you know, constrain the upside of the business? And usually the answer is I'm not really sure yet because the regulators aren't even really sure yet. So, you have to get close to understanding what the actual regulations are, maybe even help inject yourself in that process, which is an exciting thing that we can all really do here today. Uh, you know, a little bit different than other industries.

So, you got to be really aware of the risks and you got to see how they impact your upside.

Yeah, I'll double tap on that because, uh, to his point, um, it's actually where a significant amount of the opportunity is. You know, um, if we look at the, you know, massive unicorns that came out of the space, even Bitcoin from its inception, right, uh, was quasi, you know, gray area. Um, so you can't be scared of it, but you have to be extremely thoughtful and you can actually be very close to the metal, like literally pick up the phone and have a founder that goes and like, you know, talks to lobbyists or talks to, you know, regulators or litigators or there's a lot of people active in the space now. And so a founder that that isn't scared and is is proactive is going to be powerful.

Yeah, you're kind of forced into it in this space. I remember in like 2020ish we opening up a Cayman foundation, you know, using a completely reputable law firm and going through all these steps being like this is all seems so weird. But again, the investors trusted us. They also, you know, it was sort of like the the state of state of, you know, state of the state at the moment. Uh I was fortunate enough to be part of a tokenization of an NBA contract at one point that you know the NBA sued us and the athlete that was involved and it's just sort of part of the it's almost like a badge of honor to some degree.

I hate saying that but I think as long as your your intentions are of course pure and clear. There's not a legal nefarious activity. Um you've got a law firm alongside you. You know it's it's it's the investor's job to also be part of it to be knowledgeable and to help you. So I think that that that's not going to be an issue block or you know to answer the question of if it's a gray area.

space is is changing and it'll change again with the next administration and so on and that's just sort of the nature of what where we're at today.

So in the public markets oftentimes this stuff is priced in to the round. So have you had the experience and I don't think we can go through everyone of having to sort of reset expectations with a founder to lower the valuation to kind of price in the risk that maybe they're thinking is not a big problem but you might be thinking could be.

Yeah, for me it's a big deal. Um, we've been talking to dozens and dozens of of companies um that are cash flow positive, but then their their numbers don't uh uh replicate or come close to the valuations they had in 2021, right? And so um from that you have to talk them through, you know, why that doesn't make sense and okay, maybe they can stay private for a very long time and maybe have a strategic acquisition from Stripe or something like that. But um you know in the extremely competitive environment that exists today and especially now that like the floodgates are opening and you probably need to raise more money to go execute um it's one the founders are generally getting it when I'm talking to them but then the ones that really don't get it are the investors particularly from the last round right so it's a huge hurdle and lift but uh the ones that are proactive and there's ways to structure around it especially in the public markets with like earnouts and CVRs and these types of things um it can be addressed uh but yeah that's my experience from the public market side.

Excellent. Let's talk about token warrants. So, a lot of companies are issuing token warrants uh at the time of, you know, the early stage. How does that change the deal when you're looking at it? Does it sweeten it?

Um, and is it something that founders should be thinking about early on in their uh in their journey?

Yeah, I think we've seen the evolution of tokens adapt from token only deals, SAFS, and now token warrants. I think it's it's great because it creates alignment with the investor and the founder if a token does come into play. Um, there have been a lot of times and and this is pretty common where, you know, we we have a clause or something in the term sheet that pretty much says if there's ever a token that's out there, you know, we want the value and the essentially what funds are wanting to look for is where's the value going? Um, the the flag that I get is these days with such a maturing market and things growing so fast and getting into the traditional world of of finances, is a token fully needed is a big question of, you know, if they do want to launch a token, why? And what what metrics would would it increase things like that?

and also how sticky will the customers be with the token. Um because going back to the first question of you know the metrics you want to see what metrics they have now but also stripping out any incentives or any airdrops or all these other factors that can fluff up metrics quite a bit. If you remove that how would it look like? Um so the question is just is it a fundamentally strong generating business that needs a token? If yes great if no then maybe rethink it.

But having that token warrant is is a is a way to capture both sides.

Awesome. I'll just add to that. I mean, it's it really speaks to founder investor alignment, right? I think combining this question with even the last one in terms of valuation sensitivity and that kind of aspect, right? I think like we've seen tokens fail, tokens, you know, port like all these kinds of things where we have to relaunch.

I think as long as the um alignment and intention for the especially the early check, the preede and seed guys, right? I would wouldn't be so sensitive about valuations early if anything too high too early of course sets you up for failure anyway. So just being aligned with your earliest investors, giving them things like warrants that just give them, you know, comfort and and some downside protection all the way to structuring. And I've seen this maybe a couple years ago at this point, but structuring to where they have um they they have it's not liquidation preference in the regular world, but they have the opportunity to come with you if you know if you see them change chains and like these kinds of things. And so I would, you know, not be so sensitive or worry about valuation in the early days.

It just execute and get to that next first traction whether it's the that seed or series A stage to then get rolling.

Yeah, I would say a token used to be table stakes. You had to have a token and if it why didn't you have a token, you had to explain why you didn't have a token. Now it's if you have a token, why do you have a token? And you really need to explain that because there's a whole issue between who gets the actual capital from the business, right? equity or the token holders.

Then there's the issue of regulations. And then there's the issue of even if you have a really successful business that launches a token and the token drops by 80% in the first month, it it almost doesn't matter what your actual business is doing, right? You have this huge overhang and headache that you have to deal with. So, you know, it's very different than it was a few years ago. And I would say for the majority, 90% plus of businesses in the space, you don't need a token unless there's a very very clear answer for it.

The only thing I'll add, all all good points here, is uh when I get my token warrants, I'm just very particular about knowing what like circulating supply FTV might look like. Additionally, um how are the revenues from the labs company getting like sent over or used or or captured? And then third, how is the foundation structured? Because you hear all these horror stories of like, okay, here's your token war, but like here's your worthless token and all the revenues are going xyz other places, you know? So, it's important for me to just be very uh specific about that.

All right, let's change gears and talk about series A just for a couple minutes. I know probably uh by the time people reach this stage, they've got lots and lots and lots of adviserss helping them along the way, but what are the milestones and traction that uh makes a series A on the table? Makes makes it now worthwhile to actually raise that that additional funding. What what are you looking for um as as an investor at this stage?

I'll kick us off. I mean re really like I was saying earlier about traction comes in many forms. For me, it could look like sort of like a, you know, a a lighthouse customer, some kind of pilot's probably not the right word at series A, but of course, there's revenue in these other metrics, but it it looks like what is the trajectory for, you know, a much bigger version of whatever you were doing in your MVP. Again, projects skew across all these different categories. So, I don't want to speak to anyone in particular, but the idea is effectively like, do I do I see clear traction to like enterprise level customers if that's your type of business?

Do I see clear uh a clear path in you know an active pipeline to you know jumping 50% or 100% uh over your last year's numbers in in your you know AR r those kinds of things. So really it's it's it doesn't have to be anything in particular. Again it was mentioned earlier on the panel. Maybe it looks like a stronger social presence. Maybe it looks like you know v various other upticks but it it could really look like anything.

And you know the momentum is is is is like an intangible in a sense. Of course there's a big tangible aspect to it because you can you know certain metrics you can obviously of course measure but there could be other things that get people excited and a lot of times it almost feels like you know you're if you're close enough in your diligence process it almost feels like you're behind the scenes with a founder. Like I always say, you know, joining the team or being able to like be a fly on the wall for even a day, let alone longer than that, not just like a one hour uh pitch session, you're going to learn so much from a founder that you would never have had any preview to. And I think I'm a big fan of sort of like enveloping myself into the team for for a minute while I do diligence and getting getting to know like the behind the scenes world. I think one one really quick thing to add there is it's you go from the preede which is more of an ideation phase of you're figuring things out you're betting on the team then it goes to more of the execution are they executing on the ideation phase and then the scalability and how much and how fast they will scale.

Um so I think it's just important understanding that path and how big that market is that they're entering into.

Awesome. We're going to go into a lightning round uh in the last couple of minutes and just ask a bunch of questions and hopefully get some quick uh some quick answers. So, just uh open to anybody. Um you know, from a founder who's got an idea to closing that first sort of like uh preede round, how long does that generally take? Is there any kind of rule of thumb about how long they should expect to be staying in their their full-time job until they can actually start to raise some money?

It's a great question. I think some of us have some experience on that recently. But, uh there's there's not really a rule of thumb, right? It depends on your network. If you're completely new and this is your first time, I wouldn't be discouraged if it takes you six months or longer.

Uh at the same time, you'll hear, you know, hey, this guy just started and a week later he's got funding. There's no rule of thumb. Um I would say like know your numbers in the sense of what you need to sustain for at least a year if not longer in your runway. Go for that number and make it sort of like, you know, truly minimal viable and say, "Yeah, I need, you know, don't say you need 150k if you need 550k." That kind of stuff.

But I think you got to get conversations going and get that someone to believe in you or your team and you know even if it takes you know 10 checks of 50k 100 checks of five like whatever the heck it takes you know you have to just go.

Yeah very much dependent on your background right if you're a PhD from Stanford who has a you know PhD in machine learning it's pretty easy to potentially raise for you know something that might be related to that field. If you're someone who just came off uh you know the line at Trader Joe's or something and you're trying to do something completely different it's going to be a very hard kind of sell. So, nothing against those folks, but you know, just your background, your connections, uh, really are what's going to drive the fund raise. You know, if one of us were to raise here and we already know 100 VCs, it's going to be pretty a lot easier if you have a decent idea than than somebody else. So, if I was just coming at it cold, I would say I'm focusing on whatever that one lead is going to be and whoever that one advocate who is going to unlock the doors for the rest of this fund raise.

And, uh, you know, as Rusty said, be realistic about how much that amount is, right? Is it 500k you need to start and show traction? Because you don't want to give up too much equity up front. You don't need to go for 5 million plus and then all of a sudden you don't seem realistic and it's impossible to raise. So, you know, know what your strengths are, know who your network is and and know who you're trying to raise from and that anchor customer.

Awesome. We're going to shift to the next question. Simise, this is a question you and I talked about earlier. So, when does a founder know that they need to fund raise versus continuing to bootstrap? Yeah, I think the the biggest take away from that is what have they proven and what have they shown and what will it unlock after they they do raise.

Um is it capital and the runway or is it actually strategic in getting in that network and be able to scale at a much different pace. Um so it's just understanding what they've executed and how they can showcase that and then being able to to scale from there.

Awesome. And then Joe, you and I were talking about some questions. So from a public uh market perspective, what should a founder think about now that will affect them five years from now? Yeah. So in and there's there's a saying I like to kind of shop around which is like um courage inspires missionaries, right?

And so you want to like attract people that are going to support you during all the difficult parts at this stage right now. If it's just someone that's going to give you a check that's going to hassle you that you have to give a ton of equity to, it's going to mess up your next round. It's going to mess up the round after that. There's just a lot of alignment that needs to happen from day zero that a lot of founders are just very desperate of like, I need to get this money in the door. I need to get started.

which like is true, but you also need to get the right people with you because you know if you're successful the money will come but right now you're setting up the DNA of everything that you're doing.

Awesome. So when in in each of the rounds uh when a founder is is talking to to funders um is there a point where they're talking to too many people? Is is too many rejections a cause for alarm for you not to want to talk to them anymore? I think you could take it as a signal if if you get a bunch of the the same feedback and and understanding it is okay, maybe you need to tailor something or, you know, you can take that guide and and let it be your compass. Um, but I don't think it's ever too many people.

I think if if you really get out there and a lot of fun sit on the sideline until someone jumps in and then they all jump in. Um, so I I would take it more as a signal than anything else.

I think it's more of a signal like later down the road. Like if you're a more established company and you're getting that's way more qualified signal versus noise when you're earlier everyone has a different and you never know who's going to believe and be lined with you to to the point of missionary creation. I like that line um because it's it's true. It's just you know comes in all different shapes and sizes. So, no, I wouldn't I wouldn't be scared off by someone that has had 100 conversations.

And again, to me, it speaks to like, you know, the hustle and and drive of the founder talking to as many people as they can get to.

All right, so last two questions are for everybody. We'll just do it one at a time. So, the first one is what is the the most common self-inflicted wound that you see in this process? And what would be that thing that you would advise people not to do? I'll I'll touch on it and it kind of piggybacks off uh the last thing I spoke on, but founders giving too much of of their equity, right?

Um because, you know, you want to be just very locked into what you're doing for potentially five or 10 years. And then additionally, you want to have like a meaningful say in your own company. Like I'm like, you know, talking to companies towards the end of their life cycle cycle trying to go public. And it's really interesting to see how many just don't have control of their companies anymore. You know, like it's investors, it's boards.

And you know at that point it doesn't really make sense to sell that much that soon and that early. Yeah, I mean to a different degree in an earlier stage of of this industry, right? It was it was the valuations were just out of whack right away or too early. But I, you know, in principle from the founders's perspective, which I've been a founder plenty of times, agree, right? shouldn't give up too much equity in the early days is not a reason to maybe a more valuable piece of comment would be closer to like holding thing not not holding things too close to the to the chest in the early days but like drinking your own Kool-Aid and being so concerned in the NDA process and everything.

I think your mission should be to like put a flag in the ground and you know make people aware of whatever it is that you're doing and not the opposite where you're like in stealth mode for so long and no one gets to know and it's signed this NDA. Like it's it's like you can Google any idea. good luck, you know, like I don't care if anyone knows what I'm doing. Like, you know, execution is the key. So, just kind of trying to be all secretive and stealthy about it is probably not the best way.

Yeah. I think you, for me, for early stage founders, you want to take as much feedback as you can, but you shouldn't be dogmatic about receiving that feedback and adjusting your business because you're going to talk to a hundred people. They're all going to have a different opinion. So, you have to understand what your core beliefs are. take in input that helps adjust that.

But don't wholesale change your business for the opinion of the 99th or 100th person.

All right, one word. You got six seconds. Anything?

Teach the vent the teach the funds instead because you know at the end of the day all the pitches you get, we're learning and you have to educate them in the right way. So know the communication style and and teach them in the right way.

All right, thanks everybody. We're out of time. We'll be in the back and around. So feel free to approach any of us.