Reflections from Raising in a Big, Bad Bear Market
Fundraising for any venture or vision is a slog in the best of times. Add a global pandemic and looming recession to this unfavorable equation and the native New Yorker in me blurts out/wants to exclaim fuhgeddaboudit!
Luckily for the wider crypto ecosystem, this was not Maika Isogawa’s reaction.
Maika began her career in the fintech and cybersecurity industries at a number of venture-backed startups. She most recently worked at Microsoft as a cybersecurity engineer. Additionally, she helped film and produce a Japanese TV series featuring startups from across the globe. Her passion lies in strengthening the connection and correspondence of the web3 and blockchain ecosystem from the East to the West.
Maika serves on the board of Bean Voyage, a non-profit dedicated to supporting smallholder women coffee farmers. She also mentors and supports members in various women-oriented web3 and crypto organizations.
Below she shares tales from the trenches in the battle for capital and shares a few lessons from her successful raise.
Over to Maika!
You graduate during the biggest global pandemic the world has seen in a century, manage to land a decent job to start your career, quit that job, found a crypto startup, and attempt to raise millions of dollars just as the industry bursts.
That was me, Maika.
Raising a seed round for any startup during a bear market can be a daunting task. The crypto market crash — coupled with inflated valuations and lacking diligence leading to poor venture capital outcomes — has made it difficult for many young companies to secure funding.
As if that wasn’t enough, layoffs have struck larger companies as they correct for preemptive growth and high valuations reflective of a more luxurious era.
So how did Webacy raise a successful seed round amidst the depths of the 2022 bear? I owe it to three main things: a compelling solution (with progress to back it up), a solid team, and a whole lot of luck and (extended) timing.
1. A compelling solution (or anything but a rug, please)
By now, I hope that most have woken up to the scams, frauds, and impossible promises that plagued much of the hype of the last crypto bull cycle. Before our collective eyes, former giants are crumbling and many a poster child is being led away in shackles. Yet the industry has survived, clearing out many of the projects that can no longer survive on naive excitement. Though the weather has changed and the tourists have decamped, the builders have stayed! Projects that are solving real problems, innovating on technologies, and creating real value will not only survive but also become the foundation of the next cycle to come.
Venture capital has had a lot to say, too. Not only are funds more sensitive to valuations, but they also seem to be hesitant to deploy capital as they wait for the dust to settle following large exposures and intertwined funding strategies. Despite this, projects are still being funded and the majority of newsworthy raises surround companies actually solving pain points, capturing revenue, and providing value.
For example, in the wake of multiple million dollar hacks, high profile wallet drainings, and unfortunate scams - the industry needed an answer. Crypto users demanded a solution, and we were there to share our story with VCs looking for an answer.
Webacy is building for a safer web3 for all. We’re creating a suite of security tools that will become the protection layer for self-custody. Not once has someone told me that what we’re building is unnecessary—and rightfully so. Better crypto security means more stability and an environment that brings in more activity, and more economic value. This in turn creates more opportunity to build upon the technological opportunities that the blockchain presents. It also helps that our tools serve as something our investors actively need and use on a daily basis.
2. A Solid Team (or go farther, together)
If the past few months of headlines have taught us anything, it's that you need to be able to trust the people with whom you build. The same idea can have wildly different executions. In many ways it's a monte carlo simulation with one variable: The team. A team with a proven track-record of building and succeeding reduces risk for a potential investor. Some people just know how to do the thing.
It also takes a strong team of allies to build a product in a market like this one. Low token prices strike fear into many, and we’ve already seen the tourists leave crypto-land to return to their comfortable, SaaS-infused Web2 lives. Whether out of fear or necessity, people will leave when the going gets tough. Proof that your team believes in the vision and will stick-around is priceless.
The Webacy team is the bread and butter of our operation. Our collective knowledge, excitement, and drive is reflected in everything we do - from answering Discord support tickets to launching services at the cutting edge of crypto security.
3. Increasing Your Chances at Luck by Lengthening Your Time Horizon (or more runway, please)
Companies can succeed or fail for all kinds of reasons – including timing. The right series of events may well spark a viral social trend that helps a niche industry or product explode. For example, the COVID-19 pandemic forced many shops to close their doors. On the other hand, virtual and at-home based companies—such as home workout apps—saw a prodigious influx of users that may have not otherwise found their platform.
Timing isn’t everything, but it is a lot. While the dip in markets was not something to celebrate, the domino-like collapse of centralized behemoths sent billions of token value into self-custody alongside a huge influx of new users. Many self-custody solutions, like Webacy, have seen a new wave of necessity hit the market as unsuspecting holders begin their web3 journey.
By staying agile, we allowed ourselves a window to make note of the different waves that could either benefit or hurt us. Moreover, we extended this window in order to make investors more comfortable.
Put simply, we didn’t raise our round in one month. Those rapid, compressed time pressures do not work anymore with these radical environments. We took a few months to get it done the right way for us: slowly, but surely. Simply because others do it one way, does not mean you have to do the same.
Editor's Note: As Fleetwood Mac once said, “Go your own way.”
Raising the Bar (in the bear)
Regardless of your industry, the funding environment has changed. The basics remain: a compelling idea, solid execution, and real traction makes one’s value proposition undeniable.
Know it, embrace it, and just do it!
Webacy is the protection layer for self-custody.
We have a suite of services that help users protect their crypto through products like a real-time notification service (Wallet Watch), a Backup Wallet in case you lose access, a Panic Button in case of hacks and vulnerabilities, and more.
Get started for free today by signing up for Wallet Watch.