Fundraising In A Falling Market Might Be A Good Opportunity For Startups And Investors

Raising capital is crucial for any startup, regardless of the overarching market conditions.

As CEO of a global leading cryptocurrency exchange and trading platform, my team and I always look for new opportunities. It doesn't matter if the market is bullish, bearish, or going sideways, as the long-term vision is what differentiates successful projects from the rest. Moreover, as an investor, I continue to diversify my investments throughout all market cycles, as the value of projects goes well beyond the amount of funding they can secure.

After working on making KuCoin a household name for several years, there is still a thrill when our company closes another investment round. That same thrill envelops me when my team can contribute — financially or otherwise — to other initiatives paving the way for broader Web3 adoption and development. It is one of the most exciting verticals in cryptocurrency and blockchain today, and I couldn't be happier to be a small part of its ongoing growth.

Following our recent $150 million pre-Series B funding, KuCoin is now valued at $10 billion. Our aim is to expand our presence in Web 3.0 through various initiatives, including crypto wallets, GameFi, DeFi, and NFTs. More specifically, we will continue to bring value and funding to exciting projects in these categories through the KuCoin Labs and KuCoin Ventures arms.

Fundraising Can Happen At Any Time

You may think it is surprising to see us raise $150 million at this time. The cryptocurrency market has been bearish since mid-2021 and continues to showcase its overall volatility. Bitcoin recently fell below $30,000, although I am not worried about its future potential. To me, cryptocurrencies have always been a long-term game, and our investors approach this market the same way.

In fact, I would go as far as stating how a bearish market, or even a falling market, is a golden opportunity for startups and investors to take advantage of. Investors will look for new ways to diversify their portfolios, and they can explore exciting industries like Web3, fintech, biotech, etc. It is a win-win scenario for those willing to strike the iron while it's hot.

Financial uncertainty has affected the whole world since the COVID-19 pandemic began. The Russia-Ukraine war and now the expansion of monkeypox cases across various continents will only fuel more uncertainty. Despite it, investors continue to look for new opportunities and will likely flock to innovative and exciting projects. It is one of the best times for startups to get their fundraising in order, as strange as that may sound. Be brave, and venture into the unknown, as startup founders have nothing to lose in the current situation, yet everything to gain.

Moreover, most great projects come to light during bear markets. As more people actively seek solutions, there is a broader sense of innovation, disruption, and collaboration. Together, these elements may spawn the next big projects, products, and services capable of transforming the world. Every idea can find a target audience, and a falling market can serve as an excellent stepping stone to getting your project out there. There is no reason why, similar to a study conducted in 2009, more future Fortune 500 companies can't be founded during today's bear market.

The Importance of Value Investing

One golden rule I always share with my friends and colleagues is the importance of value investing. It is a matter of picking opportunities that are valued lower than their intrinsic value. This method can apply to stocks, cryptocurrencies, or technology firms. Markets can overreact to overarching conditions, as I have noticed often throughout my career. However, long-term fundamentals, including those of Web3 projects, will remain unchanged and allow firms to thrive in the longer term, despite short-term fluctuations.

For investors, value investing is the way to go. It requires a patient mindset as it will not yield quick profits. However, it is an approach that will help investors discover new startups they may otherwise overlook. This approach allowed KuCoin to discover new solutions and find ahead-of-their-time ideas that continue to deliver value to our users. For builders, nailing down the fundamentals needs to be the #1 priority, as they will make or break your efforts.

Blockchain Is Far From Dead

Even though the blockchain industry, which is near and dear to my heart, gets a fair bit of flack in the media, I can safely say it is far from dead. Instead, it is thriving like never before. Taking our recent fundraising as an example, it confirms investors are still keeping close tabs on developments, changes, and initiatives. Our push into Web3 through support, incubation and in-house growth highlights the potential of this industry despite the falling market.

If you are part of a blockchain startup, never be afraid to be innovative or bold. There is always an opportunity around the corner, even when the market seems to be working against you. Investors who treasure value investing will keep an eye out for these projects and their fundraising approach.

Never Waste An Opportunity

Bullish or bearish conditions are less of a factor than one may think for startups and investors. Those who play the long-term value will see every bearish trend as a new opportunity to achieve diversification and make a future impact.

For startups, it is a matter of getting the fundamentals down properly to enable future growth and potential. For an investor, value is the highest commodity, as it can be a catalyst for tremendous profit potential.