PRIVATE ROUNDS
Investment round — stage where a startup or company raises capital from investors to develop its project.
Each investment round has its own goals and characteristics, depending on the company's stage of development and its needs.
The main investment rounds include:
There are also many others.
For example, Insider Club partners have also participated in rounds such as:
- Key characteristics to consider when selecting projects for investment
- The history of the DUNE project, including a review of all its investment rounds
- How to determine the success of a round
ANGEL
Angel — funding from private investors, known as "business angels," to support a startup in its early stages of development.
Angel investors, or business angels — individuals interested in nurturing the idea behind a startup.
Often, Pre-Seed and angel rounds are combined, but the main distinction of this round is that, in addition to financial support, the project also requires mentorship.
The goal of business angels — to help the company grow and develop, ultimately increasing its value, and, of course, earning a profit through a significant return on investment.
- The term "angel" began to be used in an investment context in the early 20th century on Broadway.
It referred to sponsors who financially supported productions that wouldn’t have happened without their "investments."
The term in its modern sense was first used by University of New Hampshire professor William Wetzel in 1978.
This period also saw the rise and spread of business angels, who gained immense popularity amid the rapid growth of the computer industry and Silicon Valley.
Angels were the first to invest in giants like Apple.
In 1977, Mike Markkula invested $250,000 in Steve Jobs and Steve Wozniak's garage startup.
He had previously made his fortune through stock options from Fairchild Semiconductor and Intel.
Top 5 crypto angel investors:
- Balaji Srinivasan USA
number of projects — 108 - Sandeep Nailwal India
number of projects — 97 - Stani Kulechov UK
number of projects — 51 - Sebastien Borget USA
number of projects — 48 - Santiago R. Santos UK
number of projects — 47
The only ANGEL round in the Insider Club portfolio to date — BULK.
- Round size: $500k
- Round valuation: $18 million (the next round was held at a valuation of $80 million, and the Public round is expected to have a valuation of $120-140 million.)
PRE-SEED
Pre-Seed investments — the initial capital raised, often before an official funding round.
At this stage, founders invest their own funds and receive support from FFF (Friends, Fools, Family).
Examples of successful crypto startups with Pre-Seed funding:
- Ethereum — one of the most successful blockchain platforms —
raised over $18 million in pre-funding through ICO.
This early funding allowed Ethereum to develop its platform and launch its native cryptocurrency Ether (ETH). - Ripple — ecosystem creating a digital payment protocol received pre-funding from angel investors and venture firms, enabling it to develop its payment protocol and launch its cryptocurrency, XRP.
2 CRUCIAL FACTORS that investors primarily consider at this stage:
- Strong team: investors evaluate the startup team, focusing on their experience and diverse skills.
- Clear business plan: includes the business model, target market, competitors, revenue, and financial forecast.
The only PRE-SEED round in the portfolio of Insider Club — ARCoin.
- Round price: $0.005
- Round valuation: $5 million.
- Public Sale will be traded at $0.025 with a round valuation of $25 million.
SEED
Seed — этап финансирования, который крипто стартапы привлекают уже для запуска своего проекта.
The investments collected at this stage help expand the company, increase its valuation, and prepare it for larger funding phases such as Series A and B.
If the main task of the Pre-Seed stage is to test the hypotheses of the business idea, choose the direction of activity, and turn the hypothesis into a product,
then the "mission" of Seed investments — to find product-market fit — a product that solves a real customer problem and for which the customer is willing to pay.
A Seed round of investment is conducted when a startup has:
What the project team does after raising investments at this stage:
- Develops the product.
- Expands the team.
- Prepares for official market launch.
- Conducts alpha and beta tests, attracting customers and testing the product-market fit and business model.
The Seed round of a startup is usually led by angel investors and early-stage venture funds.
- Minimal entry price. Right after the listing, Seed investors do not sell coins, as the сliff is mostly up to 3 months (sometimes up to 6 months).
- Unlocking period: 3-18 months.
Types of Seed rounds:
- 1st Token Financing — in other words, the stage where the project raises funds by selling its tokens to investors.
Project from #portfolio_InsiderClub — LiveArt. - Extended Seed round —this is an additional financing stage conducted after the initial Seed round, when the startup needs more time and resources to achieve certain goals before moving to the next funding stage, such as Series A.
Project from #portfolio_InsiderClub — Primex Finance.
STRATEGIC
Strategic — the strategic round that follows the Seed round.
Once the Web3 founders have built a team, developed an MVP (Minimum Viable Product), tested it with potential users, and finalized the tokenomics for their protocol, they move on to the next stage — choosing the blockchain on which the tokenomics will be launched and selecting ecosystem partners to help implement it.
This round is called "strategic" because it often involves strategic investors, such as founders of major blockchain protocols, cryptocurrency exchanges, and large DeFi projects.
KOL
KOL (Key Opinion Leader) — refers to raising capital from key opinion leaders.
Participants in this round — industry experts, well-known investors, and public figures who have a significant audience and influence in the market. Their support and investments greatly enhance the project's credibility and visibility. In other words, they are influencers, but in the investment sphere.
As a reward for their promotion efforts, KOLs often receive perks such as discounted token prices and reduced cliff periods.
In the Insider Club portfolio:
- Magic Square
- zkPass
- Crypto Autos
Participation in a round with such opinion leaders — Sequoia Capital, Binance Labs, OKX
VC/INSTITUTIONAL
VC/Institutional —investments from large venture capital funds or institutional investors.
This type of financing involves venture capital managed by large funds, with assets ranging from $25 million to $1 billion.
Participants in this round include institutional investors—investment companies or groups of investors who pool client funds and make informed decisions about where to invest these funds.
Round size: $500,000 to $10 million.
Terms: similar to those in a Strategic round, with possible differences in the percentage of token unlocking.
In the Insider Club portfolio: Redacted
In this project, Insider Club invested in this round alongside funds like The Spartan Group, Animoca Brands, P2 (Polygon Ventures), +19 other investors.
Interestingly, on. CryptoRank the round is marked as N/A, indicating that it was truly special and likely accessible only to select participants.
SERIES A B C
Series A — round for acquiring the first customers and establishing a stable business model.
Once a startup passes the seed stage and gains momentum — in terms of user numbers, revenue, views, or other key performance indicators (KPIs) it has set for itself — the team is ready for the Series A round.
- Intended for startups with a working product and initial revenue.
- Series A investments are higher than in the Seed round — usually from $8 million to $50 million.
- The average valuation of a company raising Series A funding — between $10 million and $15 million.
Case:
The project Avail raised $43 million in a Series A round led by the top-tier fund DragonFly Capital.
- Investments are used to increase production capacities and strive for high market positions.
- A Series B company typically has a valuation of $30 million to $60 million (sometimes more).
- Financing often includes investors from the previous round, such as Series A.
Case:
Uniswap (UNI) announced a Series B funding round of $165 million, led by the well-known tier1 fund Polychain Capital. The company's valuation after this round was $1.66 billion.
- At this stage, the company aims to enter additional markets and diversify its product range.
- Funding helps them create new products or services and bring their activities to international markets.
- Scaling at this stage also occurs through acquiring other companies.
Case:
The well-known project FTX raised $400 million in a Series C funding round, resulting in a company valuation of $32 billion.
BRIDGE
Bridge round — small investment round aimed at improving the qualitative and quantitative metrics of a startup before the next larger round.
This round is conducted when a startup needs additional funding between major rounds.
Bridge rounds can be announced by a startup "throughout" all stages, but they are most commonly declared when transitioning from the Seed round to Series A, where the startup receives its first significant valuation.
In the Insider Club portfolio:
- Autonomy Network
- Nibiru.fi
(participated in allocations twice, one of the rounds being a Bridge round)
PRE-SALE
Not all projects have it.
This stage is similar to the Pre-seed round as it often involves close friends, family, and a small circle of the project's "fans."
In the Pre-sale stage, teams may offer various bonuses, such as the opportunity to be among the first to participate in beta testing, receive additional tokens, or get priority access to the product.
Investment volumes exceed $1 million.
IMPORTANT CHARACTERISTICS
Checklist of important characteristics to consider when choosing projects for investment (шndependently).
- Investment round
- Support from a tier 1 fund.
- Number of additional funds supporting the project (besides tier 1).
- Amount of funds raised in the round.
- New metric: rating from TwitterScore.io — the popularity of the project's account in the crypto space and among influencers.
Let's look at an example of a top-tier fund with which we also enter projects from #portfolio_InsiderClub — Polychain Capital
A YEAR IN THE DOLDRUMS, AND NOW A $1 BILLION STARTUP
Here's the story covering all the rounds and stages of development.
DUNE — free Ethereum-based analytics resource that reached a $1 billion valuation in November 2021, earning «unicorn status».
The success of this company was made possible by the persistence of its founders, Fredrik Haga and Mats Olsen, and their ability to attract funding at various stages of development.
- Pre-seed
[first steps]
Dune was founded in 2018 with minimal connections in the crypto space and almost no initial capital. The first investments were secured only after seven months. In March 2019, Dune managed to raise $250,000, which allowed them to take the first step toward building their product. However, this round was one of the most challenging: the founders faced numerous rejections but continued to seek support.
The turning point came when Dune signed a contract with Dharma, their first client, who agreed to pay $600 per month. This was a significant victory that brought hope to the team. - Seed
[the long road]
After participating in Binance's acceleration program in 2019, Dune continued to develop. Despite some successes, securing seed funding remained a challenge. The company made several attempts to raise funds, but all were unsuccessful.
It wasn't until 2020, amid the growing popularity of DeFi, that Dune managed to raise $2 million. This allowed them to improve the product and increase their user base.
Fredrik and Mats spent many nights in cheap hotels, attending hackathons, and supporting users. They continued to believe in their idea and worked tirelessly to achieve success. - Series А
[rapid growth]
At the beginning of 2021, Dune was gaining more attention in the crypto community. Users actively used the platform to track revenues in decentralized finance and other metrics. This allowed the company to raise $8 million in Series A in just one week. Investors from USV saw Dune's potential and quickly closed the deal.
From that point on, the Dune team was able to significantly expand their capabilities, hiring new employees and completely overhauling the application. By the end of April 2021, the user count continued to grow rapidly (as of the publication, the number of followers on X — 186.3k), which attracted even more attention from investors. - Series B
[success]
By the end of 2021, Dune had become a popular tool for tracking trading volumes on OpenSea and other NFT platforms. The user base was growing by 30% monthly, and the company continued to develop without significant marketing expenses.
In October, Coatue offered Dune a deal valuing the company at $1 billion. Fredrik and Mats were impressed by Coatue's in-depth analysis and offer, and the Series B round ended up being $69.5 million.
What does this story show us?
Dune — example of how perseverance and belief in an idea can lead to incredible success. Despite numerous rejections and difficulties, the founders of Dune kept moving forward, round after round. Their journey shows that a startup can overcome all obstacles and become a "unicorn" if they don't give up and continue to believe in their mission.
HOW TO DETERMINE THE SUCCESS OF A ROUND
Key elements in determining the success of a round:
- AMOUNT OF FUNDS RAISED
he total capital raised during the round shows the level of trust and interest from investors in the project.
Fun fact: In 2024, projects have raised over $3.67 billion (current as of the publication date). - NUMBER OF PARTICIPANTS
The number of investors participating in the round reflects the level of support and risk distribution. - TYPES OF INVESTORS
The involvement of major venture funds and institutional investors increases trust in the project, as they conduct thorough due diligence before investing.
As an example, let's take a look at one of the projects in the portfolio of Insider Club — Redacted, which attracted investments from The Spartan Group and Animoca Brands.
«As the new cycle in the cryptocurrency market begins to gain momentum, we are optimistic about the Redacted team and look forward to seeing where their next phase of development will take them. They are pushing the boundaries of what is possible with their technology. Instead of just creating standalone products, they are developing an entire ecosystem. We are very excited to be part of this team». Kelvin Koh, Partner at Spartan Group - USE OF FUNDS
Effective use of the funds raised for product development, marketing, and other strategic initiatives influences the future success of the project.
A clear plan for fund utilization helps investors understand how the project plans to achieve its goals and what results can be expected. - ACHIEVEMENT OF GOALS
It is crucial to assess how successfully the project has met its stated goals and milestones [ a key stage in a project that marks the completion of an important task or objective] after the round is completed.
Projects that meet their goals and show progress validate their potential and attract further investor attention.
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