Crypto Startups Risk Losing VC Support by Overpricing Themselves, Says 10T CEO

Crypto startups aiming for sky-high valuations may be missing out on venture capital opportunities, warns Dan Tapeiro, CEO of 10T Holdings. Speaking at the Consensus conference in Toronto on May 14, Tapeiro expressed concern that founders are overestimating their companies’ worth, making it difficult for VCs to justify investments.

“For some reason, founders and CEOs think that they should be raising capital at 50 to 80 times revenue,” Tapeiro said during a panel discussion. “That makes it very hard for us to make a return for our liquidity providers.”

The overvaluation trend has led 10T Holdings to decline over 200 deals—including well-known names like FTX, BlockFi, and Celsius, all of which later collapsed. Tapeiro emphasized that even promising startups are turned down if their valuation-to-revenue ratios are too high.

“We won’t invest in companies we like if the price isn’t reasonable in the beginning,” he noted, adding that 10T targets firms valued over $400–$500 million with no more than a 10x revenue multiple.

Moderate Startups Valuations

Tapeiro’s cautious stance reflects a broader sentiment in the VC world. Startups with realistic valuations are seen as offering better exit opportunities and more attractive terms for future funding rounds. Lower entry prices also give investors greater upside potential with reduced risk.

“Valuation is very important,” Tapeiro stressed. “It impacts everything from follow-on rounds to eventual exits.”

However, despite these concerns, the crypto VC market remains robust. According to PitchBook, crypto venture capital deals surged to $6 billion in Q1 2025—a more than 100% increase from the previous quarter—despite deal volume only rising by 8.8%. This suggests that while caution exists, capital is still flowing into the sector.

A Balanced Strategy: Tokens and Equity

Dan Morehead, CEO of Pantera Capital, who spoke alongside Tapeiro, offered a more diversified investment approach. Morehead advised VCs to invest across both private equity and crypto tokens, depending on market cycles.

“Each one has their pros and cons,” Morehead said. “There are times when tokens are overpriced and equity is cheap, and vice versa. I always advocate for a balanced spectrum.”

Pantera’s strategy has paid off—Morehead shared that 86% of the firm’s investments have delivered returns, with 22 portfolio companies achieving unicorn status.