Venture capital in the crypto Sector: how do VCs work?

How do experts rate start-ups in the crypto sector? We give an insight into the daily work of Benjamin Horvath. He is a founding Partner of Blockrocket, a venture capital firm based in Berlin.

You search, evaluate, analyze and in the end your crypto investment still flops. After you have already told all your friends that you will get rich with the Shitcoin, you now have to row back. That’s why we want to give you an insight into the Venture Capital Give blockrocket. Some tips should also help you evaluate the next crypto startup.

First of all: what exactly is a “VC” (venture capital)?

In everyday life, we often use VC for the company / person behind it, which Venture Capital makes it available. These are investors who invest in the very early stages of a company. Blockrocket invests, for example, in the pre-seed and seed phase of a company.

According to Benjamin, all projects that are “pre-product market fit” are eligible. Sales or growth are not foreseeable at such companies, at least for the time being.

“This can really range from three guys and girls in the garage to an already finished product – we invest in different projects.”

The garage product, which overnight becomes a bestseller, sounds more like a Hollywood movie, but in fact corresponds to reality. ”We are talking about companies that are in the life cycle between 6 and 18 months,” says Benjamin.

Blockrocket usually invests between 100 and 500,000 euros in projects – in return there are either shares or tokens of the company.

What exactly does venture capital look at in terms of projects?

The question of questions: how do I get money from VCs as a start-up founder? This is not so easy to answer, Benjamin confirms us. In fact, it varies from company to company, industry to industry.

“We try to keep it as simple as possible. Companies with a high probability to prevail, these are the ones we are looking for.”

A bet on the future, outsiders could describe the whole thing.

“And predicting the future is damn hard.”

Benjamin’s approach is to use the time effectively to find out as much as possible about the company. What criteria does he look at in detail?

According to him, the question should rather be: what exclusion criteria should not occur? In principle, his job is to look for mistakes, because it is much easier to find them than one or two things that stand out in particular.

The team is by far the most important factor. It is best to have this experience in a particular industry: “If you have a team that develops a solution in the financial industry, they should also have experience. Between 5, 10 or 15 years, depending on what you did.”

Opportunity costs could also be a factor. For example, if a founder could earn 200,000 euros a year in a bank, but opting for the start-up is also a plus – but is not a criterion for success for a long time.

What Blockrocket also does is send out personality assessments. In some cases, these consist of 2-300 questions and are intended, among other things, to help find out whether the founder can use the knowledge from his previous jobs for the start-up.

Is an idea alone enough to get money?

The answer is perhaps: if the team is experienced and has a sophisticated concept, it could get capital even without a prototype.

Then nothing can stand in the way of a successful start-up in Germany, right?

Crypto in Germany – A Love-Hate Relationship

Why has Germany overslept the development around Web 2.0 and what do we have to do to be more successful in Web 3.0? According to Benjamin, we have to create ecosystems in which the best people like to stay.

“People also go to Silicon Valley because they know that the best companies, VCs, the most money and the most knowledge are there.”

In his opinion, Germany should aim for this goal. It remains to be seen whether many small ecosystems will not actually develop because employees prefer to work remotely. According to Benjamin’s personal experience, bringing specialists from abroad to Germany is a disaster, at least at the federal level.

A picture of BeInCrypto

Benjamin does not see the whole topic around crypto regulation as a problem. However, he would like the policy to take a little more into account on the entire crypto space. “Politicians should better ask the community what their opinion is on regulations. Fortunately, there are community initiatives against certain measures,” he explains.

He wants long-term thinking from politics, because investors also think in the VC sector with a horizon of 5 to 10 years. The prosperity that we currently have, we should also constantly work on ourselves anew.

Benjamin does not want to give us a price prediction for Bitcoin 2025, but he refers to a report by the American investment company Ark Invest: According to the calculation, analysts expect a price for Bitcoin of about 300 to 400,000 US dollars.

“When corporations and governments invest in Bitcoin, the price naturally rises.”


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