Identifying Investment Traps in the Crypto World: A Guide to 10 Types of "Toxic VCs"

Original author: @therosieum

Original compilation: zhouzhou, BlockBeats

Editor's Note: This article satirically depicts 10 common types of cryptocurrency venture capital risks, namely those VCs who seem to support but are actually only interested in profit. For example, they may emphasize "long-term holding" on the surface but sell off during market downturns; or recoup their investments through "marketing companies", even forcing project teams to operate according to their demands. The article emphasizes that true investors should possess technical abilities, understand the project vision, and provide value beyond capital.

The following is the original content (for the sake of readability and understanding, the original content has been reorganized):

In this industry, we have all dealt with VCs. Some are benefactors, while most are not. Here is a guide to help you identify them in the wild and steer clear as early as possible.

Disclaimer: This article is satire. Maybe. If you feel offended, you might belong to categories 1-9, and no VCs were harmed in the making of this article.

1. "We do not support airdrops" VC

They will promote the establishment of "real value", but the moment the quotas are unlocked, they will immediately sell their tokens. What they actually mean is: "We do not support you doing airdrops, but we are very happy to collect our airdrops." These people will talk about token economics in front of you, while their portfolios have already shrunk by 80%. The first rule of the VC dumping club is: you cannot talk about the VC dumping club.

2. VC of "Please cooperate with my marketing company"

They invested $500,000 and now want to recover that money by forcing you to hire their cousins' marketing company for $600,000. This marketing company has only three clients: you and two other investment firms under this VC. Their marketing strategy? Paying influencers who purchased the same JPEG to post paid tweets.

3 "Investment Theory Driven" VC

They haven't updated their investment theories since 2021. They are still talking about "Web3 social" and "metaverse infrastructure," but while you are giving the presentation, they are secretly searching under the table for "what is TEE technology." However, now if the project presentation mentions "AI," they will definitely invest.

4. "Founder-Friendly" "Phantom" VC

They will take three weeks to thoroughly understand your project, ask you to fill out 17 forms, introduce you to their entire team, and then completely disappear when it’s time to remit the funds. Six months later, they will congratulate you on Twitter for successfully raising funds from others.

5. VC who said "I used to work at [insert traditional financial company]"

Joined the crypto industry in 2022, but won't let you forget that they once worked at Goldman Sachs. They may be active on crypto Twitter now, but still live through their LinkedIn experiences. The only value they can provide is "professional email templates" and "best practices for shareholder tables." They have never used a hardware wallet and are still asking what miner fees are.

6. FOMO VC that "I need a response within 24 hours"

For months, they completely ignored your proposal until they saw another VC talking about your field on Twitter. Suddenly, they appear in your DMs, requesting an "emergency call." They will offer terrible terms and set a 24-hour explosive deadline. If you accept, they will still delay sending the relevant documents for three weeks.

7. Paper Hands of "We Are Long-Term Holders"

They watched Cathie Wood's interview on CNBC, where she said that Bitcoin will rise to 1.5 million dollars by 2030 - now they keep repeating that they are "long-term holders" and that they are "aligned with the founder's five-year vision." But when faced with a 30% drop, they panic sell and blame you for "uncontrollable market conditions." Even so, they still demand their board seats.

8. "Thought Leader", But Has Done Nothing

With 50k followers, they have accumulated their audience by retweeting others' opinions. Their pinned tweet is about "founder culture," even though they have never really created anything themselves. They often make proposals like, "Provide advice for your project in exchange for 2% of the tokens." Their advice usually is: "Have you considered getting anonymous Twitter influencers to talk about it?"

9. VC that "we typically don't invest at such an early stage"

They will act as if they are helping you by assisting with seed round investments, only to then demand treatment equivalent to Series B. You need to provide daily updates, board control, and direct contact with the development team. They will message you on Sunday night at 11 PM asking, "Quick question - when can I buy a Lamborghini?"

10. Understanding the True Builders of the Industry

They will ask the right technical questions and have experienced multiple cycles. They won't waste your time; the value they provide is not just capital. They understand your vision because they have also struggled in this industry.

They are like unicorns—you might think they don't exist, but once you find one, you'll never look back to engage with other types of investors.

Don't compromise on who you let invest in your project. The right partners can determine your success or failure, rather than changes like "We'll decide to pivot in six months and create an AI-driven Web3 social layer for DeFi users."