Why seed stage crypto startups shouldn't be judged by revenue

Varun Datta, the CEO of Truth Ventures, recently warned investors against applying standard business metrics to seed stage crypto startups. He specifically noted that demanding recurring revenue from these early projects is a mistake that overlooks the nature of new technology development.

This advice comes as the industry faces a high rate of project failure. Recent data from RootData shows that 99 crypto projects have either filed for bankruptcy, closed down, or become inactive during 2026. These numbers highlight the risks involved in supporting startups that are still finding their product market fit.

Investors are now being encouraged to focus on long term potential and technical utility rather than immediate cash flow. While the high failure rate is concerning, experts suggest that early stage projects need time to build their infrastructure before they can generate steady earnings.