Industry Outlook Graphics

Venture Capital

Michael Dershewitz
Chief Operating Officer
With more than two decades of finance and investing experience, Michael joined Arca in March 2021 from Amazon’s Corporate Development team where he led investments and acquisitions in software and transportation. Michael earned degrees in Finance and Computer Science from the University of Virginia and an MBA from Harvard Business School.

Early-stage companies will benefit from record-high inflows.


Venture funding for digital asset companies hit an all time high over $8 billion in the third quarter of 2021, and the average Series B valuation has grown to over $500 million. Megafunds focused on later-stage VC investments are being raised today at north of a billion dollars per fund, driving more exit opportunities and higher valuations for later stage firms. Early-stage companies will benefit from these successes, made possible by reputable institutional capital entering the space.

Venture capitalists will seek Play-to-Earn business models.


Axie Infinity, the fast-growing blockchain-based game, has allowed gamers to earn real-world salaries that are multiples of their previous income. They can do this through what is called ‘Play to Earn’ features, where players earn tokens that can be sold for value outside the confines of the game. Axie has more than 2 million daily users today and its parent company was just valued at $3 billion. Founders with traditional gaming backgrounds are seeking to integrate play-to-earn economics into new blockchain-based games.

VCs will have to actively engage in community governance to advance projects forward.


Venture capitalists traditionally receive ownership stakes and influence through capital and management advisory. Decentralized projects on the blockchain have upended this framework by introducing governance tokens that let the user community itself vote on business decisions such as product roadmaps, token issuance, and capital disbursements. Digital asset VCs must collaborate with these communities to promote business initiatives and increase network effects.

Web 3.0 will gain market share.


While the prevailing Internet structure sees big corporations collecting and controlling private data from individuals, the blockchain has enabled a new, decentralized Internet known as Web3. This has many benefits vs. the current system, including giving control of personal data back to its owners, visibility on management, and encouraging innovation. We believe that the Web3 foundation was laid this year and predict an acceleration of start-ups and usage in 2022.

Rayne Industry Predictions 

2022 Digital Asset Outlook- Venture Capital-Michael Dershewitz

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