IOSG founder's conference insights: Many project teams and VCs are running out of money, Token 2049 has almost become the last hope for financing

Written by: Jocy, Founder of IOSG

The scale of this industry is still growing further. This year, I have attended various events such as ETHDenver, ETHCC, Zuzalu in Montenegro, and Edcon. At this 2049 event, I encountered many old friends again. In fact, every time such a conference attracts a large number of participants in the industry, many companies have set budgets for attending such conferences. Therefore, with the growth of the industry, even during a bear market, the number of attendees continues to rise.

LPs continue to support early-stage VCs that are growing within the industry, and VCs are constantly backing emerging teams. Teams are expanding and growing in scale, and it seems that everything is moving in a better direction. However, the reality is not so. For many teams, this 2049 event has become one of their last hopes for financing. If the bear market does not end, this could be their team's final brand exposure, as most early teams have expanded over the past two years, leaving their runway nearly depleted. Some teams have a very high burn rate and, in such a market, are left with only 5 to 10 months of time. They even go so far as to buy expensive tickets or sponsor booths at 2049 to pitch to more potential investors.

Additionally, I attended an exclusive event hosted by the Medici family, which had about 120 attendees, roughly half of whom were VCs. Among these 60 VCs, about 90% of the funds are currently raising capital. Due to regulatory pressures in the U.S., fundraising has become very difficult, and they believe that Asian Chinese LPs will be more generous in their support based on their brand and influence.

However, the reality is different from the bustling scene at the 2049 event. Most crypto-oriented LPs are tightening their belts due to the bear market, while traditional LPs are falling into skepticism about the industry's value and use cases. Therefore, the expectation of finding suitable VCs/LPs for financing at a conference is unrealistic. It is clear that the bear market will continue for some time, and this is a test of the adaptability, endurance, and resilience of founding teams. Just like in the last bear market cycle, many founders managed to hold on until March 2020, only to see their hopes dashed when Bitcoin hit $3,000, leading them to disband their teams and abandon their projects. Of course, three months later, DeFi Summer erupted, and the crypto industry experienced a rebirth, with many practitioners seeing unprecedented dawn.

Unlike previous years, this year's 2049 is no longer so commercial. Global VCs and founders were invited to participate in various side events, making this week in Singapore a gathering of crypto practitioners aside from F1 spectators. My habit during such blockchain weeks is to arrange some catch-up coffee chats with founders we have previously invested in during the day, and then attend interesting events and catch up with old friends in the evening (basically, during the week of the conference, I sleep at 1 AM and wake up at 7 or 8 AM to line up for meetings).

From IOSG's perspective, our direction this year has been to provide a professional academic stage to help our portfolio reach the market, allowing more industry practitioners to discover, recognize, and engage with them.

Academics and socializing do not conflict; we generally separate them into two areas. Those who enjoy learning can quietly take notes in the internal presentation area, listening to various presentations and panel discussions, while friends who prefer socializing can connect with thousands of old friends from OFR, exchanging TG contacts and chatting.

In fact, focusing on new themes at 2049 is a bit strange because builders and developers rarely attend such conferences, which primarily provide a stage for capital connection. The power of capital can drive industry progress. We can see the $2 billion valuation arms race in the L2 space, where zkEVM, holding hundreds of millions in cash, is making rapid technological advancements, continuously spending on hiring and competing in mainnet and application ecosystems, even in a bear market, attracting more talented individuals to join.

Additionally, in the AI space, we invited over 20 related founders to share at the IOSG OFR during the ECC in France two months ago. This sector has already become an aggressive betting ground for most U.S. crypto funds. Modular Labs received over 14 term sheets during the bear market, Gensyn's valuation exceeded $400 million, and ChainML completed two rounds of financing in less than six months.

If you look back at the themes of this year's OFR events, we focused on protocol security audits, ZKML and Generative AI directions, LSD, and the Modular track. Of course, at the upcoming DevConnect in Turkey, we will invite application and FOG founders. Currently, applications on L2 have become an inevitable trend for industry innovation. We eagerly await these outstanding founders to continue solving the industry's application challenges.

I inadvertently wrote too much. I believe that those who generally need to read such summary articles are often wanderers, as most practitioners are actively involved. Therefore, I suggest that those still reading this article treat the next event as a trip, to experience the crypto-native power of the developer community, to find and create shining places in the industry, rather than just waiting for the next bull market.