Opinion: Tom Bruni, Editor-in-Chief, Vice President of Community, stocktwits
Since the dawn of the dot-com boom, it is almost impossible to hear the term “VC” (venture capitalist) without immediately recalling the image of Sandhill Road.
Silicon Valley VC and its global counterparts have been sitting behind literally, hollow closed doors for decades. Only a few decide which innovators and trends will receive access to critical funds.
It has become clear that millions of great founders are excluded from receiving capital each year, but what is less understood is the systematic elimination of countless potential investors who can completely change the game.
So, crypto influencers have turned the script upside down and accomplished what the VC has been doing over the years. Democratize access to early stage investment opportunities. Tradfi will dispel them as “a hype merchants.” Still, the fact is that by sharing cutting-edge research and coordinating their incentives with followers, crypto influencers are some of the most accountable investors in the field.
From hype merchants to revolutionaries
Critics worry that influencers are pump and dump operators who intend to manipulate markets and unsleashed retail investors, but this argument ignores the accountability mechanisms introduced automatically by influencer-driven investments. Traditional VCs have the luxury of hiding behind NDAs and other walled gardens, but the recommendations of bad influencers destroy credibility and receive immediate community feedback.
Operating in a permanently transparent environment creates permanent accountability. Influencers should maintain a higher standard than VCs operating with limited surveillance, when all trades and results are publicly available. At the same time, it is important to note that leaving the “no access” model does not automatically occur in the “no risk” model. Investors should always do due diligence and act responsibly, even under the guidance of crypto influencers and online communities.
Decompose VC exclusivity issues
Before understanding how this new kind of influencer is destroying the VC model, it is important to explain why traditional systems are exclusive in the first place. In the US, you must meet the requirements of certified investors to legally invest. These include strict thresholds such as net worth over $1 million (excluding major residence) or annual income of at least $200,000. Plus, first-class funding requires personal connections and exorbitant lowest commitment. Fees and illiquidity are features, not bugs.
As a result, less than 2% of US citizens, and even fewer people worldwide, can invest in early stage projects, which is the period when it is historically the highest return. And if you don’t come from major investment hubs like Silicon Valley, New York City, or Boston, the chances of breaking the mold are even less likely.
In addition to exclusivity, the system essentially supports people with capital and networks to succeed, and VCs have no incentives to initiate change. By delaying IPOs, companies build huge private ratings once possible only in the open market, limiting everyday investors from purchasing favorable opportunities.
Influencers open gates for better access
Crypto influencers have completely crushed this model. Social platforms such as X, YouTube, Discord and Telegram have created a direct path between promising projects and retail investors. They highlight emerging trends, protocols and founders, highlighting the work of analysts and are exclusively for VCS.
Related: Former Love Island Star tips on how to get viral in Crypto: van00sa, x Hall of Frame
They also publish their entire portfolio (as this information is readily available). This means that anyone interested in investing no longer has to wait several months for the VC to disclose their position.
On the Community Investors platform, retail investors share due diligence, cooperate with research, and highlight opportunities that are otherwise impossible to discover. Everything is public and crowdsourced and available to anyone with internet access.
Community Due Diligence beats closed door analysis
Critics who argue that crypto influencers lack VC-level rigor cannot see the difference in information flow between Defi and Tradfi. The Crypto community is committed to radical transparency, elimination of intermediaries and an open technology ecosystem.
Onchain Investing is irreparably linked to auditable smart contracts, public talk nomics, and community members who can verify claims in real time. When influencers recommend a project, thousands of people can quickly analyze talknamics and stress test the product. Group information can identify red flags that most experienced VCs may miss.
The game has real skin as influencers invest their capital and risk their reputation. This contrasts with traditional VCs who often quietly invest other people’s money and are generally involved only when it comes to profiting their portfolios.
Access switches exclusiveness every time
The current investor landscape excludes 98% of participants, while influencers are leading the path of true financial inclusion. And as more traditional assets become tokenized and available to new classes of investors, those who lean towards education, community and personal responsibility will have new opportunities to thrive.
Traditional VCs are welcome to adapt to this reality and continue to ralise behind the systems that serve a few at the expense of many. However, one thing is clear. True innovation occurs when opportunities and capital flow to people with the right ideas, regardless of the network.
Crypto influencers make their vision realistic and deliver one transparent recommendation at a time.
Opinion: Tom Bruni, Editor-in-Chief and Vice President of the Community, StockTwits.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
