Overview of the mechanics of attracting investments in web3 products 2024-2025

Institutional and Angel Investors – The Backbone of Fundraising

Bitcoin’s price is a core benchmark of the cryptocurrency market, often called the “defining” one. While it is difficult to statistically prove the influence of its price on overall market activity, the correlation between price dynamics and market activity is evident. Changes in Bitcoin’s price are frequently closely linked to other important market indicators, demonstrating the interdependence of their behavior.

We are entering a new bull market phase: prices are climbing with transaction volumes. Also, we see an increase in investments in the fundraising stage.

In 2024, the crypto market has seen significant changes, including:

• Spot ETFs approval.
• Bitcoin halving.
• Growing number of institutional investors
• Growing interest in RWA projects. 
• Massive AI Integration and DeFi development.
• Expansion of the TON ecosystem and increased interest in the Telegram Mini Apps platform. 

Institutional and angel investments are the primary sources of project funding. Together, they account for up to 91% of all funds raised in 2024. While angel investments are direct tranches from large individual investors, institutional investments encompass funding through venture and corporate funds, DAOs, investment incubators, accelerators, exchanges, hedge funds, and investment guilds.

Public Investments involve retail investors’ participation in various funding events, such as token sales, NFT investment sales, and more.

Over the past six years, institutional and angel sources have remained dominant in the structure of all raised funds.

Attracting institutional investments requires a clear and long-term plan: pitch deck preparation, working with funds, participating in events, and much more. At the same time, attracting angel investments can be significantly simpler and faster.

In this article, we’ll explore the key ways to attract project investments: direct funding without a finished product and raising capital through a ready product. The overview is based on our market research, expert interviews, and practical experience working with partners.

Attracting Investments Through a Product

Attracting investments via public sales and institutional investors typically requires a solution. The market offers a wide range of concepts, each accompanied by its own specific requirements. We will have a look at some of the most prominent cases of 2024 that show the diversity of approaches and ideas.

DeFi Protocols and Infrastructure Products

Concept: The product allows users to supply liquidity to DeFi services, creating conditions for stable income. Clients can invest their funds and earn profits from:

• The protocol.
• The protocol + pool income.
• The protocol + pool income + token exchange.

Technical Implementation: Landing page and protocol development (e.g., Aave, MakerDAO, Compound).

Target Audience: Web3 investors, DeFi enthusiasts, and traders.

🚩 Red Flags:

• Building infrastructure, deploying the protocol, and promotion are technically complex processes and require substantial financial investment, including liquidity.
• You need an experienced dev. team to ensure protocol security.
• Launch time: from 6-8 months.

NFT Collection/Token Launch

Concept: Launching an NFT collection with varying functionalities and value tiers. Each owner receives a fixed monthly income in USD.

Target Audience: Crypto investors, DeFi, and NFT enthusiasts.

Technical Implementation:

• Development involves designing and building a smart contract for payouts, functionality for minting NFTs, and a marketplace that provides investor information.
• Marketing the NFT sale to an external audience.
• Listing on NFT marketplaces.
• Reporting regular updates to investors.
• Regular payments in stablecoins.

🚩 Red Flags:

• The global interest in NFTs is currently low.
• Potential regulatory attention.
• There is a need to develop a comprehensive ecosystem.

Investment App/Bot in Telegram

Concept: A Telegram app or bot that helps users invest in yield platforms, exchanges, and other financial instruments, earning a share of the company’s profits.

Technical Implementation:

• Developing a Telegram app with payment functionality.
• Marketing the app to an external audience.
• Integration in relevant blogs, channels, and bots.
• Regular updates to investors.
• Regular payments.

Target Audience: Retail investors, gambling community.

🚩 Red Flags:

• There is a high risk of turning the app into a Ponzi scheme. You can also face reputational risks.
• The likely audience will be small retail investors with low involvement in the project’s long-term development.
• To keep the app attractive, daily payouts should be at least 0.5% per day (~182% annually).

Creating a Utility Token

Concept: A utility token with a deflationary mechanism, serving as the currency of the ecosystem. Users can purchase the token in the app and on DEX, using it for staking and trading.

Technical Implementation:

• Token and website development and purchase placements in relevant channels.
• Token listing on DEX/CEX.
• Marketing the token sale to an external audience.
• Ensuring liquidity & token price stability.

Target Audience: Crypto investors and DeFi enthusiasts.

🚩 Red Flags:

• Costs of providing liquidity.
• If the token value drops, you will face a trust crisis.
• Potential regulatory attention.

Attracting Angel Investments

Significant investments in development and ongoing efforts to secure funding are necessary to attract large investors and retail audiences. These investments can range from $10-20k to $500k. Smaller teams often may have little budget. However, such projects can still secure investment funding. 

Angel investments offer several advantages:

• You do not need a product.
• There is no need for significant outreach spending.
• Marketing is optional.

The following factors are essential for angel investors:

• Early-stage participation in a steadily growing project makes the investment more attractive.
• Understanding the development team's strategy, supported by clear metrics such as projected revenue, turnover, user numbers, and other KPIs.
• Transparency regarding where the investments will be directed and how you will generate profit.
• Investment protection: clear timelines for placement, payout schedules, and the possibility of refunding the investment body.
• Partnerships with major players and positive recommendations from trusted contacts.
• Risk premium and a high return (5-6% monthly payouts without trust; 3-4% if you have a good reputation).
• Regular monthly payouts and project income reports.