Part 3: The Venture Capitalist’s Dilemma and Why VCs Are Now Startup Conductors

As liquid startups embrace tokenized chaos and instant liquidity, VCs must evolve into ecosystem maestros or risk becoming the Blockbuster of investment.

Explore all parts of the series: Part 1, Part 2, and Part 3. Additional articles will be linked as they are published. Stay updated in real-time by following Tom Serres on X.com or LinkedIn.

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Liquidity Isn’t Always a Blessing

Liquidity sounds like the ultimate dream for founders. Tokenized governance, instant capital, and a global investor base all promise speed, flexibility, and freedom from the constraints of traditional fundraising. But early liquidity often behaves like a double-edged sword. While it offers opportunities for rapid growth, it also introduces volatility, speculation, and immense pressure.

For tokenized startups, valuation can shift overnight. One day your token is flying high on speculative hype, and the next it is crashing harder than your favorite altcoin in a bear market. The roller coaster doesn’t just affect token holders; it can destabilize the entire project. Market sentiment frequently dictates your trajectory more than product-market fit or actual adoption. Founders are no longer just building products; they are managing public perception, which can be as unpredictable as the speculative markets themselves.

And then there’s the dark side of liquidity—new kinds of threats and attacks. In liquid markets, your token isn’t just a measure of success; it’s also a vulnerability. Competitors or bad actors can exploit your low-liquidity markets, tanking your token price by flooding it with sell orders or manipulating sentiment through misinformation. Retail investors, or “normies,” often interpret these price drops as signs of failure, even if your operations are running smoothly and your roadmap is on track. Unlike traditional startups, where setbacks can often be traced back to internal missteps or poor decisions, liquid startups are uniquely exposed to external attacks that can cause chaos despite positive internal progress.

Get crypto native and dive into When AIs Learn to Ape, The Rise of Machine Economies, or Decentralizing Consciousness.