Truth Ventures CEO Varun Datta has urged crypto investors not to demand recurring revenue from seed-stage companies. According to Datta, such tests may be suitable for established businesses but could produce the wrong assessment when applied to companies at the start of their development.
Funding Trends
Galaxy Research reported that venture firms invested about $4 billion across 355 crypto and blockchain deals during the first quarter of 2026, a 50% decline from the previous quarter. The number of deals fell 16% during the same period.
Datta's comments draw a distinction between accepting an unworkable business and recognising that a new company may not have had enough time to build recurring income. He believes that early-stage investors should begin with the founder's knowledge of the problem rather than revenue figures that may not exist.
Investment Strategies
For Datta, product design and the value delivered to users provide more suitable evidence when a company has only recently begun operating. He attributed the failure of many crypto projects to attempts to replace a working commercial model with speculation around their tokens.
Under the approach outlined by Datta, investors would examine how a product could gain users before its available capital runs out. They would also assess whether the founders have identified a route from initial product development to a company capable of supporting itself.