Article
16 min read time
This articles is based on Stablecoin Builder Series’ Webinar Episode 1, focusing on funding stablecoin startups.
Executive Summary
Navigating startup funding stages in the stablecoin space requires understanding what separates successful raises from rejections. The same investors who passed on generic pitches actively seek founders with differentiated insights and sustainable unit economics. Understanding what drives these dynamics helps startup raises succeed in an increasingly competitive market where execution trumps ideas.
In this article, four leading investors reveal how they evaluate first round opportunities, from pre-seed through Series A. Learn how startups manage common fundraising mistakes, why friends and family rounds matter before approaching institutional capital, and what it takes to convince other investors to back your next round.
Launching Utila’s Stablecoin Builder Series with Top VCs
The stablecoin ecosystem has become one of the most competitive sectors for startup funding. Venture capital firms that ignored crypto two years ago now have stablecoins at the top of their mandate. Early stage companies building in this space face both unprecedented opportunity and intense scrutiny from investors.
Four leading venture capitalists recently shared unfiltered insights about stablecoin fundraising at a webinar hosted by Utila’s Co-Founder and CEO, Bentzi Rabi:
Richard Aseme, head of African investments at Digital Currency Group
Evi Muco, VC investor at Flourish Ventures, an $850 million fintech fund
Jake Dwyer, founder of Factor Capital
Matt Homer, general partner at The Venture Department
Together, they’ve backed Bridge (acquired by Stripe for $1.1B), Alfred, Crossman, and dozens of other stablecoin infrastructure companies. Their portfolio spans pre seed rounds through Series A, giving them direct visibility into what separates successful fundraising from rejection.
From Skepticism to Strategy: Trends Shaping Your Next Funding Round
The panel opened by discussing how dramatically the investment landscape has shifted for stablecoin startups in the past two years. The conversation revealed a market transformation that caught even experienced investors by surprise.
Here’s how Richard Aseme described the shift:
12 months ago, I could have pitched emerging markets fintech using stablecoin rails and people would say ‘what are you talking about?’ Now I have inbound wanting to understand what we’ve seen in emerging markets as a precursor to what could happen in the West.
Similarly, the possibilities to have a successful pre-seed round and seed round were severely limited just 18 months ago. Now venture capital firms actively seek exposure to the space. This shift happened fast. As Matt Homer put it:
If you have LPs, they’re asking you what’s your stablecoin strategy.
Even generalist investors who avoided digital assets have found themselves compelled to develop a position. This creates leverage for startup founders with compelling projects. The right team solving a massive problem can command better seed valuations and raise larger funding rounds immediately.
The panelist also noted that the quality of founding teams entering the space improved dramatically. Homer sees incredible talent flowing in from fintech and adjacent sectors:
Stablecoins has really become a magnet for founder talent. Incredible founders coming into the stablecoin space from other sectors like fintech and other related fields.
There has also been a change in the type of institutions that are becoming interested in integrating stablecoins. For example, just six months ago, banks showed little interest in stablecoin conversations. Now these financial institutions actively explore integration. The recent acquisition of Bridge by Stripe validated the sector for corporate players who needed proof of concept before committing resources.
Where Smart Money Sees Opportunity
After establishing how investor sentiment has shifted, the conversation turned to where founders should focus their efforts. Despite massive traction in the stablecoin space, opportunities are not created equal when you try to raise money for your pre-seed or seed round.
Matt Homer identified three categories that have become especially saturated:
Stablecoin neobanking providers – Extremely crowded with numerous players competing for the same customers
Stablecoin Layer 1s – Multiple chains fighting for attention and liquidity
Orchestration solutions – Flooded market with similar value propositions
The competition in these areas makes landing seed investment significantly more challenging. While you can still build successful companies in these spaces, investors now demand genuine competitive advantage and differentiation to justify investment.
The panel then shifted to discussing underexplored areas where early stage companies have better odds of successfully raising capital. Homer asked: “Is there a way to do local stablecoins not country by country, but in a way that is highly scalable?”
This represents an unsolved challenge. Current approaches require building market by market, but a truly scalable solution across multiple regions could command significant venture funding due to the massive value it would unlock.
FX and liquidity infrastructure emerged as another critical gap. Evi Muco explained the core problem:
There’s still so much fragmented liquidity that in most cases it’s actually not always cheaper to go through stablecoin rails.
For founders raising capital, this means there’s a clear problem to solve. The on-chain world lacks sophisticated instruments that complex enterprise clients expect – forwards, swaps, and other tools common in traditional finance. Building this infrastructure could attract substantial seed rounds from investors looking for differentiated plays.
True programmability remains largely theoretical as well, which creates fundraising opportunities for founders who can demonstrate practical applications. Homer noted that most current solutions simply replace old rails with new rails without unlocking stablecoins’ unique capabilities. He suggested specific use cases that remain unexplored:
Corporate treasury optimization – Payments routing through preferred jurisdictions for tax advantages
Automated royalty distribution – Secondary markets that instantly pay original creators
Micropayment infrastructure – Enabling economic models impossible with traditional payment systems
Richard Aseme, on the other hand, brought the conversation back to emerging markets, reminding founders that “cross-border payments still aren’t fixed in many places in the world. A lot of people don’t have bank accounts in many places.”
Aseme thinks emerging markets offer greenfield opportunities. B2B payments don’t function properly across much of the developing world. For founders targeting these markets, the fundraising pitch becomes simpler: you’re not competing with dozens of similar companies, and you’re solving problems that clearly don’t have existing solutions.
Jake Dwyer added another dimension for founders to consider when positioning their fundraising: derivative effects of broader adoption.
As businesses receive money through ordinary course of business via stablecoin settlement supported by big banks, that unlocks interesting opportunities around programmability of cash flows.
This insight matters for pitch decks because it shows investors you understand how the market will evolve and where future value creation lies.
The Five Mistakes That Kill Fundraising
With market opportunities identified, the conversation shifted to execution. The panelists shared the most common mistakes they see in pitch decks and founder conversations – errors that consistently result in rejection regardless of how promising the underlying opportunity appears.
Mistake #1: Ignoring Unit Economics
Understanding unit economics matters more than most startup founders realize. Jake Dwyer explained the fundamental challenge:
The fraction of margin you can get on any individual stablecoin transaction is minuscule. You really are in a game where you have to have the expectation of massive volume flowing through your platform.
The reality is stark. You need either a credible path to trillions of dollars in payment volume or a strategy to use stablecoins as your wedge into higher-margin services.
Think about how Ramp or Square operate. Their revenue doesn’t come primarily from processing payments. They captured budget in adjacent functions – expense management, business software, lending. Stablecoins become the entry point to automate high-margin opportunities within a category. This business model works. Pure payment processing rarely achieves venture returns.
Mistake #2: Lacking Credible Go-to-Market Strategy
Most pitch decks lack credible go-to-market strategy. Matt Homer emphasized this point:
I don’t think there’s enough in most pitches around a credible go-to-market strategy. In crypto there’s not really much IP – it’s all about execution.
Founders present interesting ideas without explaining how they’ll win in a crowded market. Your pitch should assume ten other teams are building the same solution. What gives you the unique right to win?
Venture capital firms want to see three specific elements in your go-to-market:
Differentiated wedge – A specific entry point that creates competitive advantage
Detailed execution plan – Specific milestones and timeline showing how you’ll achieve them
Activated relationships – Network and connections you can leverage immediately, not theoretical partnerships
Generic strategies don’t close funding rounds. Homer noted that investors want to see “a very credible deep plan for how you’re going to achieve that and how you’re going to execute against it.”
Mistake #3: Focusing on TPV Over Quality
TPV numbers mislead investors and founders. Evi Muco stated clearly: “Often founders think that all we care about is TPV. What I care most about is the quality of the volume.”
Orchestration companies acquired long-tail PSPs that churned quickly. Payroll and payment companies face the same problem. Customers shopping for the cheapest solution will leave when someone undercuts your pricing. Your pitch needs clarity about customer quality.
Explain who your ideal customer profile is and why they’ll stick around long term. Starting with the long tail makes sense if you have a vision for moving upmarket to enterprise. Show the path from initial traction to sustainable revenue.
Mistake #4: Pitching Irrelevant Market Size
Market size slides often hurt more than help. Richard Aseme warned:
I don’t think it adds that much when you show stablecoins is a trillion dollar industry and you show some graphs up and to the right when what you’re actually trying to do has nothing to do with just stablecoin supply.
Founders spend slides on total stablecoin supply when their use case applies to 20% of real-world transactions. Talk about your specific market opportunity instead. If you’re solving cross-border B2B payments in Southeast Asia, size that market with realistic assumptions. Investors discount generic TAM slides immediately.
Mistake #5: Missing the Founder Slide
The founder slide gets skipped in too many decks. Matt Homer revealed his evaluation framework for projects at at the pre seed stage and seed stage, :
At pre-seed and seed, it’s 60% about the founder, 40% about the idea.
Some decks don’t mention who’s starting the company or why they’re uniquely qualified. Investors need to understand:
Your background – Relevant work experience and domain expertise
Why you – What makes you uniquely positioned to solve this specific problem
Your team composition – How founding team skills complement each other
Track record – Previous successes, exits, or relevant achievements
Your background, domain expertise, and relevant experience need prominent placement. Investors back people more than ideas at earlier stages.
How Much Traction You Actually Need
After discussing common mistakes, a natural question emerged from the audience: how much traction do you actually need before approaching venture capital firms? The panelists acknowledged this varies significantly based on founder background and company type.
The answer depends on your track record. Matt Homer was direct about this reality: “If you’re a repeat founder who’s had multiple exits, there’s less you have to show.” First-time founders need to demonstrate more before professional investors write checks. This isn’t fair, but it reflects how venture capitalists evaluate risk.
The panelists also noted that traction comes in multiple forms beyond revenue and not all traction carries equal weight. Growing to a billion dollars in TPV means nothing if your unit economics bleed cash. Richard Aseme noted: “Not all traction is equal or relevant. I’ve seen a business that has grown to a billion of TPV is out of business in a year.” High churn signals you haven’t found product market fit regardless of topline numbers.
Investors want to see founder-led sales driving early growth. Your vision should come through clearly when you pitch. If you don’t have perfect founder-market fit individually, build team-market fit. Richard Aseme emphasized:
If you yourself do not have perfect founder market fit, then team market fit, you know, and recruitment is important.
Balance your founding team with complementary skills. Not everyone needs to be a great pitcher, but collectively you need vision, execution capability, and domain expertise.
Having a differentiated insight matters enormously. Evi Muco explained what captures her attention: “There’s something about having a key insight that is differentiated. If there’s something you know and most people don’t know, being able to communicate that upfront early in the slide is a way to garner attention.”
This insight might come from years in an industry, access to a specific customer base, or technical innovation others can’t replicate.
Angel investors and friends and family often provide initial capital before institutional investors enter. These early funding rounds let you prove concepts and build minimum viable product. But seed investors and pre seed investors want more than an idea. They need evidence you can execute and that a real market opportunity exists. Financial projections matter less at the pre seed stage than demonstrating you understand your customer and can acquire them efficiently
Understanding Why Good Companies Get Rejected
One audience member asked what separates companies that get approved at investment committee from those that don’t. The question resonated because many founders struggle with this exact scenario – they reach IC but don’t get the yes.
Matt Homer provided critical context that reframes how founders should think about rejections:
VCs are not looking at a company in isolation. They’re looking at multiple companies at a given point in time… they’re part of portfolio construction considerations.
In other words, you’re being compared against other opportunities, not necessarily competitors. Evi Muco expanded on the hidden factors:
We might say no because we don’t want to have conflict in the category. So we might not be ready to invest in that category. Or we might be wanting to wait to see how the category plays out before making one bet.
He recommended founders research who sits on investment committees and understand what those individuals care about personally. Beyond what was discussed in the webinar, it’s worth understanding additional dynamics at play in the fundraising process:
Pacing matters more than founders realize: Venture capital firms deploy capital throughout the year with target allocation percentages. Your pitch might come at a moment when they’ve already committed significant amounts to similar companies. The timing of your raise can matter as much as your product.
External factors may play an outsized role: Some investors will pass to avoid category conflicts. Others want to see how your sector evolves before committing. A lead investor might hesitate if they don’t see enough room for a large enough ownership stake.
You need more resilience than you might think: The fundraising process involves accepting that many rejections stem from factors outside your control. A solid founding team with early traction will eventually find the right investors. But you need to pitch enough potential investors to account for portfolio construction constraints, timing issues, and thesis misalignment.
Practical Fundraising Tactics That Work
The conversation concluded with tactical advice on the mechanics of actually reaching investors and structuring your pitch. The panel addressed common questions about deck length, outreach strategies, and building connections.
Bentzi Rabi, drawing from his two years as a venture capitalist before founding Utila, emphasized brevity: keep your pitch deck under fifteen slides. Long decks signal unclear thinking. Tell your story in twelve to fourteen slides maximum.
Matt Homer added an important caveat about geography:
There are different norms among VCs based on geography. US VCs like short decks. European founders often have 50-page decks with valuations already set.
The bottom line? Research your target investors’ preferences before you send anything.
The panel reached consensus on one point: cold email is essentially dead for startup funding in 2025. AI tools like Clay flooded inboxes with messages that seem personalized but aren’t. Investors now treat unknown senders like spam calls.
So what works instead? Warm introductions remain the most effective path to pre-seed funding. Bentzi calls this fifty percent of the work. Use your network to find someone who knows the investor you’re targeting. A quality introduction from a trusted source gets your pitch read and scheduled.
For situations where warm introductions aren’t possible, Matt Homer suggested Twitter or LinkedIn DMs work better than email:
I would do like a DM on Twitter or something and I’d make it very short and I would include like one sentence or so and I would include the link to the deck.
Richard Aseme emphasized the value of in-person connections: he attends events where startup founders congregate. Real-life interactions at founder communities provide opportunities to build relationships before you raise. These conversations happen more naturally than cold pitches.
Accelerator programs, although not discussed directly by the panelists, can also provide crucial connections to seed investors. For example, some Silicon Valley programs offer more than capital. Their demo days and alumni networks create warm introduction paths to venture capital firms. The vast majority of successful early stage startups leveraged some form of structured network to reach investors.
What Investors Want to See
Building a successful stablecoin startup requires combining exceptional founding team quality with genuine market differentiation. Domain expertise, unique insights, and relevant track record separate compelling pitches from generic ones.
Unit economics need to work at scale. Show either a credible path to processing trillions of dollars in payment volume or explain how stablecoins become your wedge into higher-margin adjacent services. Your business strategy should capture budget across multiple functions.
Traction quality matters more than size. Explain who your ideal customer profile is and why they’ll remain customers long term. Your go-to-market strategy needs specificity and credibility. Show the network and relationships you’ll activate. Remember that crypto has minimal intellectual property protection. Everything comes down to execution.
Richard Aseme summarized it well: if you have something particularly compelling – either relatively unique, novel, or solving a massive problem with the right team – you probably have leverage in terms of seed valuations you can command.
The stablecoin fundraising environment in 2025 offers more opportunity than ever. Winners will combine genuine innovation with exceptional execution.
Early stage companies need to understand that successfully raising venture capital requires more than a good idea. You need the right founding team, credible traction, sustainable unit economics, and differentiated positioning. Venture funding rewards founders who demonstrate all these elements together.
About the Stablecoin Builder Series
Utila launched the Stablecoin Builder Series to provide actionable insights for founders building in the stablecoin ecosystem. This first episode featured venture capitalists from Digital Currency Group, Flourish Ventures, Factor Capital, and The Venture Department discussing early stage fundraising.
Future episodes will cover marketing, team building, go-to-market strategy, and other critical topics for stablecoin startup founders. The series brings together investors, operators, and successful founders to share practical knowledge that helps builders navigate the fundraising process and scale their companies.
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