The Differentiation Dilemma in Web3 Venture Capital

The typical Web3 VC pitch has become clichéd, with statements like 'deep relationships across the ecosystem' and 'our network is our edge' having lost their significance due to overuse. This has led to a situation where liquidity providers have become desensitized to such claims. In response, my colleagues and I at TBV have focused on developing a distinct value proposition by creating something unique. Research has consistently shown that emerging managers tend to outperform established funds, delivering higher returns on average. However, they struggle to communicate their value to clients, resulting in capital flowing to established brands rather than those with potential. To address this, we decided to make our pitch a product rather than a promise, focusing on what our fund actually owns, such as events, data, and platform value for founders. This approach has led to the development of a people-centric deal engine, with our event series drawing over 43,000 attendees and more than 100 partners in 2025. Other VC firms, such as Outlier Ventures and Paradigm, have also adopted innovative approaches, including accelerator models and technical contributions to protocols. These models share a common trait: the fund itself is a product with utility beyond capital. The key to success lies in building something that makes the story self-evident, rather than relying on relationships and value that cannot be measured. As the Web3 space continues to evolve, managers who build real infrastructure will be well-positioned for the future, while those who rely on traditional pitches will find it increasingly difficult to compete.