What Is a Funding Round The Purpose of Fundraising Rounds in Crypto

In the crypto market, a Web3 startup that wants to build and scale a product almost always has to go through multiple funding rounds, each serving a different purpose and carrying a different meaning. So what exactly do these fundraising rounds represent, and why do they matter?

1. What Is a Funding Round? Why Is Fundraising Data Important?

A funding round refers to a stage in which a company raises capital to build, develop, or expand its product. In crypto, funding rounds play a critical role for nearly every project, as each development phase typically corresponds to at least one investment round.

Funding rounds are usually divided into stages such as Pre-Seed, Seed, Series A, and beyond. Each round involves different types of investors, including venture capital funds, angel investors, incubators, and accelerators.

Analyzing fundraising data first and foremost helps assess the level of market confidence in a project. Who invested, at which stage, and at what valuation reflects the outcome of due diligence. It also shows whether the project has convinced experienced and highly selective investors of the quality of its team, technology, and long-term vision.

For example:

Well-known funds such as a16z, Yzi Labs, and Paradigm do not invest randomly in projects that exist only on paper. Doing so would directly damage their reputation.

In crypto, fundraising data is also crucial for identifying supply-side risk, especially sell pressure from early investors. Information about total capital raised, entry prices, and vesting schedules allows investors to estimate potential token sell pressure after TGE or during unlock events. This helps avoid unfavorable short- and mid-term supply-demand scenarios.

Additionally, the size and timing of fundraising rounds reveal whether a project is still in experimentation, entering an expansion phase, or preparing to scale. This helps investors calibrate return expectations more realistically. Reviewing fundraising data is also an effective way to avoid FOMO-driven narratives with weak fundamentals. Narratives with real potential are usually those that multiple investment funds are willing to back with capital.

2. Common Funding Rounds in Crypto Projects

In crypto, Web3 fundraising rounds broadly resemble those in traditional markets, including Pre-Seed, Seed, Series A, Series B, and so on. In earlier cycles, a flashy whitepaper and strong connections were often enough to raise capital. Today, crypto fundraising has shifted decisively toward real products, real traction, and credible paths to future revenue.

Each funding round reflects not only a development stage, but also the true maturity of the project.

Below is an overview of the most common fundraising rounds in the current crypto landscape.

Pre-Seed Round

Pre-Seed remains the earliest fundraising stage for Web3 startups, but the old “idea plus pitch deck” model is largely obsolete. Today, projects raising Pre-Seed capital are generally expected to have a demo-ready MVP, a full-time technical team, and a clearly defined product direction rather than relying solely on narrative.

Pre-Seed investors are typically angel investors, incubators, and accelerators, with far higher selectivity than in previous cycles. Round sizes usually range from 500,000 to 2 million USD, accompanied by low valuations and strict terms. Most startups fail at this stage because they cannot demonstrate execution capability. If a project clears Pre-Seed, it almost always progresses to Seed, with very few skipping directly to Series A.

Seed Round

The Seed round is the most critical stage for most crypto projects. This is where the product is refined and begins testing market fit. Today, Seed funding is no longer just about building. Projects are expected to show real users, early usage data or onchain activity, and a clear 12 to 18 month roadmap.

Investors at this stage are primarily professional crypto VCs. Seed round sizes typically range from 2 to 10 million USD, depending on the sector. However, Seed rounds have become significantly harder to raise, and many projects stall here due to insufficient traction.

Series A

Series A is reserved for projects that have demonstrated basic product-market fit. The bar is much higher than in previous cycles. Stable mainnet operation, measurable user activity or onchain revenue, and narratives supported by real data are now baseline requirements.

Series A rounds typically range from 15 to 50 million USD and involve large funds. Even so, only a small fraction of crypto startups successfully raise Series A, and most projects either pivot or shut down after Seed.

Series B, C, and Later Rounds

Series B and later rounds are mainly reserved for base-layer blockchains, major infrastructure projects, or protocols with clear and recurring revenue. The focus is on scaling, operational optimization, and preparing for liquidity events such as TGE or M&A. In the current environment, projects reaching these stages are extremely rare.

Strategic Rounds

Strategic rounds are becoming increasingly common and focus more on long-term collaboration than short-term financial returns. Strategic investors often bring ecosystems, infrastructure, or distribution rather than large amounts of capital. However, they tend to exert significant influence over project direction. Many strategic rounds effectively serve as stepping stones toward M&A, making them suitable only for startups with a clear strategic path and a willingness to trade off autonomy.

Other Fundraising Models in Web3

Beyond traditional rounds, crypto projects may also use:

• Public Sales such as ICOs, IEOs, and launchpads, which are more tightly regulated and produce fewer successful outcomes, but still provide liquidity.
• SAFT agreements, commonly used in private rounds to mitigate legal risk.
• Community Rounds or Fair Launches, which enhance decentralization but are difficult to apply to large infrastructure projects.

Platforms such as MEXC Launchpad or Kickstarter-style CEX offerings are also popular fundraising mechanisms, although they tend to benefit users more than institutional investors.

3. Common Misconceptions About Fundraising

When analyzing fundraising data, many researchers and traders fall into confirmation bias. Below are the most common misconceptions.

If a top-tier fund invests, the project is guaranteed to succeed

In reality, even elite funds such as a16z and Yzi Labs make frequent mistakes. Many funds allocate capital across portfolios, accepting high failure rates in exchange for a few outsized winners. Strong fundraising does not guarantee strong execution. In some cases, investments are driven by relationships rather than genuine project potential.

Raising more capital is always better

Raising too much capital, especially at high valuations, can become a liability. Unrealistic growth expectations, high burn rates, and down-round risk are common consequences. Token sell pressure from funds also increases. Large raises by projects such as Starknet, zkSync, and Monad have clearly demonstrated these dynamics.

High valuation reflects real value

Valuation is simply the outcome of negotiation at a specific moment. In crypto, high Seed or private valuations often compress upside for retail investors from the start.

Fundraising data is always transparent

Not all rounds are fully disclosed. Public data may be incomplete, rounded, or shaped more by marketing than actual terms. Some projects even exaggerate or fabricate fundraising numbers to appear more credible.

Market context does not matter

The same project raising capital in a bull market versus a bear market carries very different implications. Fundraising at cycle peaks says little about long-term resilience.

4. Websites and Tools for Tracking Fundraising Data

CryptoRank

CryptoRank is a crypto analytics platform that provides real-time fundraising data for projects and investment funds across the market.

To check fundraising data:

• Visit https://cryptorank.io/
• Select the “Fundraising” section to view real-time funding activity.
• Click on individual projects for detailed round information.

SoSoValue

SoSoValue is a crypto data and research platform focused on aggregating market information, categorizing industry news, and presenting project data through structured research dashboards. It has been widely used by the community from 2024 to 2026 due to its clean interface, fast updates, and comprehensive project coverage.

To view fundraising data on SoSoValue:

• Visit SoSoValue
• Navigate to the “Fundraising” section.
• Select a project to view detailed funding round information.

Crypto Fundraising

Crypto Fundraising is one of the largest platforms dedicated to crypto fundraising news and data. It originated on Twitter and later expanded into a full website for better usability.

To use Crypto Fundraising:

• Select “VC Deal Flow” to view real-time fundraising activity.
• Select “Investors” to explore investment fund profiles.

Dropstab

Dropstab provides comprehensive fundraising data for projects, including VC rounds and community-driven raises such as IDOs and ICOs. The platform initially gained popularity through EtherDrops, a Telegram bot that delivers real-time onchain wallet activity.

While Dropstab may not update fundraising data as quickly as other platforms, it offers more visualized statistics and summaries.

To find fundraising data on Dropstab:

• Visit Dropstab
• Select “Funding Rounds” to view market-wide fundraising information.

5. Conclusion

Understanding funding rounds is essential for evaluating crypto projects beyond surface-level narratives. Fundraising data provides insight into market confidence, execution maturity, valuation risk, and future token supply dynamics. When analyzed correctly and in context, it becomes a powerful tool for filtering signal from noise in an increasingly competitive crypto market.

Disclaimer: This content does not constitute investment, tax, legal, financial, or accounting advice. MEXC provides this information for educational purposes only. Always do your own research, understand the risks, and invest responsibly.