From: thepipeline_xyz
The sentiment surrounding meme coins within venture capital (VC) circles has notably evolved, moving from initial derision to a more nuanced understanding of their market implications [00:22:15].
Venture Capital’s Role in Crypto Development
On social media platforms like Twitter, a common sentiment is that VCs are detrimental to the crypto space, viewing meme coins as an egalitarian technology [00:19:09]. This perspective often frames venture investment as “evil” and something that disadvantages the crypto community [00:19:30].
However, venture funding is critical for developing complex blockchain technologies, such as high-performance, low-fee EVM chains like Monad [00:19:56]. Building these foundational technologies requires significant investment to hire engineers and solve challenging problems [00:19:56]. Venture funding contributes significantly more positive outcomes for the applications users want to use than is often acknowledged [00:20:33].
While there are “good and bad” VCs, and past instances exist where VC-heavy projects led to retail investors being “dumped on,” funding is essential for development beyond just meme coin projects with no utility [00:21:03] [00:21:16] [00:22:01].
Evolution of VC Sentiment Towards Meme Coins
Initially, VCs were perceived as laughing at and insulting meme coins [00:22:25]. This changed as they recognized the limitations of the “high FDV (Fully Diluted Valuation), low float” meta, where there are few buyers for unlocked tokens [00:22:25].
Incentives and Reputation
The primary reason for VC disdain towards meme coins is not necessarily personal dislike, but rather the differing incentives of those operating in the venture space [00:23:27]. VCs need to raise funds, and a positive reputation for crypto facilitates discussions with large investors about the future of finance [00:23:43].
It becomes more challenging for VCs to justify investments when the public perception of crypto is dominated by “Harry Potter Obama Sonic 10” tokens rather than legitimate emerging technologies [00:24:23] [00:25:01]. Meme coins can create confusion, as they appear alongside more traditional financial assets, making it harder for VCs to explain their value to limited partners (LPs) [00:25:42].
Open and Permissionless Nature
The permissionless nature of crypto means anyone can create meme coins, which makes it harder for those trying to promote the “good aspects” of the industry [00:27:10]. Despite this, some individuals in the VC space are personally “pro-meme coins” [00:27:20].
”Builder Cope” and Financial Nihilism
There is a “builder cope” phenomenon among development teams regarding meme coins [00:27:57]. The concern is not simply that meme coins are pumping, but that their success can foster “financial nihilism” – the belief that the entire industry is a scam, because people attribute the easy money made from meme coins to all crypto assets [00:28:06]. This narrative can be frustrating for teams building meaningful projects [00:28:30].
Concerns also exist regarding opaque token unlock schedules and OTC (Over-The-Counter) token sales, which can disproportionately benefit founders and institutions at the expense of retail investors [00:29:01] [00:29:35].