Partner at $500 Million Fund Explains Key Criteria for Investing in Startups

Brett Gibson, a partner at Initialized Capital, has revealed the main criteria used by his venture capital firm to invest in early stage startups and shared his views on the most promising products on the market.

Initialized Capital invests in early stage companies before they get to product/market fit, which means they still need to develop a product that meets the needs of the market. In that stage, Initialized Capital looks at the startup founders as the main criteria for investing.

“Before you actually know what the product is and what market exactly they're going to be serving, the founders are the strongest signal,” he said.

Founders who have a technical background and have built products in the past are what Gibson’s firm is usually looking for.

In terms of use cases, Initialized Capital is eyeing those aiming at bridging the gap between the crypto world and the traditional financial system. According to Gibson, these are the use cases that have the highest chance to bring crypto into the mainstream.

Finally, Gibson shared his view on how crypto startups should prepare for the upcoming recession, as the funding environment is likely to become more “adversarial.”

“We're advising companies to have more runway, to think more about keeping lean, spending less,” he said.

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