In 2023, despite Bitcoin's strength, the #Web3 #startup industry faced a drastic drop in investments. Crunchbase reported a 76% reduction in capital attracted compared to the previous year, totaling only $1.8 billion in the second quarter. The total number of deals dropped by 51% to 322. The first half of 2022 was even worse, with Web3 projects attracting only $3.6 billion, a 78% decrease.

Sergey Kovalev, founder of #Afford.Capital described the situation as "grotesque" as funding decreased nearly tenfold. High-value projects traded at significant discounts, and startups were dwindling.

Large venture capital firms managed well, but smaller companies struggled, some even suspending operations. Alexander Mamasidikov, founder of #CrossFi noted that the crypto startup funding #market matured and shifted from a 'revolution' perspective to an 'evolution' view. More interest was directed towards projects bridging TradFi and DeFi.

In the first six months of 2022, 15 investment rounds exceeded $100 million each, but this year saw only three such rounds, indicating a significant decline. Notably, big investors shifted focus to artificial intelligence, which attracted $25 billion.

Mamasidikov highlighted the need for proper positioning, niche identification, audience engagement, community building, and continuous technological improvement for successful projects.

In a challenging market, startups seek funding through grants, corporate funds, accelerators, or crowdfunding platforms. UNICEF, for instance, offers non-equity contributions. Polkadot Foundation and grant programs like NEAR and Harmony Ecosystem Fund support Web3 initiatives.

In conclusion, while the venture capital market faces difficulties, large firms fare better than smaller ones. The crypto startup funding market is evolving, focusing on projects bridging traditional and decentralized finance. Success hinges on proper project management, with inexperienced staff and a lack of clear strategies causing many startups to fail.