Web 3.0 — A paradigm shift for investors & entrepreneurs

The tech is here to stay and so are the builders

4 min readJan 15, 2024

The Crypto winter between 2020 till almost the fag end of 2023, has lasted for one of longest period since the first block of Bitcoin was mined. During Q3 2023, the crypto and blockchain sectors saw a significant decline, registering only $1.975 billion in investments, hitting a new industry low since Q4 2020, following a peak of $12 billion in Q1 2022.

This decline can be seen in the quarterly investment figures shown above. This despite the deal flows remaining virtually steady.

Show me the money

Notwithstanding the above facts, the Web 3.0 industry saw over $94 Billion in investments since 2021 (Source: Global Private Equity Report). This figure corresponds only to the Equity investments and not in crypto tokens. The recent Bitcoin ETF approvals by SEC and rollout of the products by Blackrock and others has opened new doors for the mainstream financial industry to seriously start considering investing in the Web 3.0 space.

The space is now seeing considerable increase in deal flows as multiple venture funds, hedge funds, PE firms, and other investors are making a beeline to being part of the Web 3.0 ecosystem including major companies like JPMorgan, Goldman Sachs, Google, BNY Mellon, General Atlantic and Disney.

What used to be a space only for early stage investors or grant funding by the Layer 1 and 2 ecosystems, is slowly becoming the playground that includes later-stage growth funds, crossover funds, and even buyout funds. All this, while there is practically little or no regulatory support in most countries across the globe.

New Sectors, Newer Founders

The recent crypto turmoil put aside for a while, we have seen a huge growth in the number of new areas applying the concepts of Web3. The following are some the areas which are seeing some credible use cases being built:

Real World Asset Tokenization
Digital Identity (DID) and Self-Sovereign Identity (SSI)
Decentralized Social Media
Zero-knowledge Proof
eSports & Gaming
Gen AI + Blockchain + tokenization
Bitcoin Ordinals / BRC20

The time-tested sectors of DeFi, NFTs, infrastructure and security still continue to be the top draw and attract significant interest among the investors as well as builders.

This coupled with the number of new-age entrepreneurs who are diving into the various spheres encompassing Web3. A huge number of 1st time entrepreneurs are getting into this space with unabated enthusiasm and some serious risk appetite. The deal flow data above is a good showcase to this point!

This is a good indication of the ongoing health of the industry. So the tech and its founders are here to stay!

Underwriting Risks

While the eventual gains are substantial, the industry needs to be approached with caution and blend the web3 with common business sense, so we can better analyze the risks associated. One reason, according to the Bain’s Global Private Equity Report, the time has come to marry the tech with the experiences of investment professionals. The rush for capital will be matched with questions about viability, cost analysis, credibility of the founders and associated teams, informed due-diligence and long-term scalability. Of course the investors own risk appetite and funding mandate will need to be fulfilled too.

The shift has begun

Web3 is going to emerge as a critical theme in the next 5 to 10 years and the shift has already begun. Global investment data shows a significant underlying resilience, despite a slowdown in funding throughout the last couple of years. If we go with the trends, Bitcoin halving, the ETFs and entry of big ticket players will change the game shortly!

For the many funds sitting on the fences, it is time to expand your horizons and get on to the deal table and start foraying into web3 — albeit slowly — but eventually you need to go deep. The Web 3.0 landscape is evolving and the time is now!

For the entrepreneurs in the space, hone up your ideas, product, tech, and pitch deck as the paradigm is shifting. The playing field has widened, and will eventually become choosy and discerning. So, refine your strategies, innovate relentlessly, and position your venture appropriately. The journey is going to be challenging no doubt, but the opportunities are boundless.

About Pivot

Pivot is a global venture accelerator firm dedicated to the Web 3.0 industry, created by founders, for founders. Pivot’s selected startups are focused on milestones & are not bound to periodic curriculum-based programs. Founded by Anshul Dhir, a 3x founder in the Web 3.0 space, and mentor and investor in over 50 companies in Web3. Pivot is being supported by some great founders & Angels in this industry including Polygon, Delphi Digital, Blockchain Founders Group, Liminal, Biconomy, BitsCrunch, Tegro, Router, QuickSwap & more. We are also supported by Tier 1 ecosystems such as BNB Chain, Polygon, Arbitrum, ICP, Manta Network, Mantle apart from many VCs, launchpads, Exchanges & many more.