The Collapse of VC and the Path to Democratized Startup Funding in the Age of AI
How AI and blockchain are reshaping startup fundraising
Recently on the podcast "The Death of the Lean Startup and the Future of VC Investing in the AI Era" there was an insightful discussion about this year's B DASH CAMP—a private invite-only conference for Japanese IT startup founders, VCs, and KOLs. One notable trend was the heavy focus on Deep Tech.
This push for Deep Tech appears to stem from a harsh reality: there’s a growing consensus that the traditional software/internet sectors no longer offer high-growth exit potential. With that, VCs are scrambling to justify their value by investing in capital-intensive Deep Tech projects, despite their longer timelines and higher uncertainty.
Roll-up M&A strategies were also discussed, though even that is a tough road in the current environment. What surprised me was how aggressively VCs are leaning into harder, slower bets like Deep Tech instead of, say, investing in global software startups where the risk-return profile may still be better.
VC is Dead?
There’s now a rising global sentiment that “VC is dead.”
Numerous reports , news point out that over the past decade, the S&P 500 has outperformed most VC funds. Declining exit opportunities, poor market conditions, the increasing irrelevance of IPOs, and a general fatigue within the venture space are challenging the VC model’s legitimacy.
Personally, I believe VCs have strayed from their role as true risk-takers. By demanding early monetization from startups, they've ironically made themselves less relevant in early-stage ecosystems.
In Japan, the so-called “100 Billion Yen Wall” for IPOs has made the situation worse. If a company’s market cap doesn’t exceed 10 billion yen within five years of IPO, it faces delisting. As a result, investment banks are avoiding small IPO deals altogether.
With large-scale M&As rare in Japan, VCs are still mostly dependent on IPOs. Historically, they'd push portfolio companies to IPO just to hit return targets, even if long-term viability was unclear. But now, that strategy is becoming unsustainable.
Global Trends: Delay IPO, Extend Returns
Globally, we’re seeing the opposite approach—delaying IPOs as long as possible (think Stripe). But that means return timelines are getting longer and more uncertain.
Even secondary sales and M&A exits are facing pressure. Big Tech—the main buyers—are constrained by antitrust scrutiny (e.g., Figma x Adobe). All this makes it harder to hit the mythical 100x power-law returns that once defined the VC game.
So yes, we’re at a massive turning point in startup funding—one driven by both macro and tech forces.
AI Changes Everything
AI is accelerating this shift. Product development, once costly and slow, is now faster and cheaper than ever.
Microsoft’s layoffs in 2025 hit engineers hardest. Salesforce halted new grad engineering hires. Even Computer Science majors—once the most in-demand—are reportedly struggling to find jobs.
Engineering, once the backbone of tech, is being replaced by AI. No-code tools, automation, and even voice-to-app workflows ("vibe coding") are making it possible for solo builders to launch products in hours.
We’ve already seen solo-built tools generate thousands—even millions—in revenue.
Just as social media democratized influence, AI is democratizing development itself.
From Product Explosion to Capital Gaps
But a product ≠ a business.
You might build a working app in a day. But turning that into a growing, sustainable business? That still requires sales, marketing, BD—areas that AI can't fully replace (yet).
This creates a new need for funding—but a different kind of funding.
The traditional VC model, where solo builders pitch to a dozen firms, prep decks, endure due diligence, and sign term sheets, feels outdated.
Imagine this instead:
You launch a promising AI-built product.
You list your funding needs on-chain.
Investors review, send 1,000 USDC to your wallet, and boom—you’re funded.
A few weeks later, they exit with a return through the next round.
It’s like what Indeed did for jobs—“1-click apply.”
But for capital: “1-click invest.”
This is not sci-fi. It’s what blockchain enables.
The frictionless, permissionless future of funding.
Goodbye Pitch Decks. Hello Protocols.
Crypto has had its chaos—memecoins, rug pulls, online casinos. But beneath that, a powerful shift is happening.
Projects that generate real value—real revenue, real users—will become investable not through old-school VCs, but via decentralized platforms. Legacy processes like investor meetings, legal contracts, term sheets, wire transfers, and quarterly reports will be replaced by smart contracts and tokenized fundraising.
Startups won’t need to beg VCs anymore.
Investors worldwide will discover and fund promising projects directly.
This is already happening through mechanisms like ICOs (Initial Coin Offerings).
Yes, ICOs have had their share of scams. And yes, securities regulations remain a challenge. But innovation always finds a way—and the teams solving those challenges today will define the future of capital formation.
We’re already seeing the early signs of this shift through projects like Sonar and Believe, which have demonstrated not only the strong demand for permissionless startup investing but also the viability of this business model.
They represent the first proof points that this new capital market infrastructure isn’t just theory—it’s already being validated in the real world.
The Age of Solo Builders Needs a New Capital Stack
Even with AI, building a lasting business still requires capital.
The seed stage isn’t going away—but it doesn’t need to be VC-led anymore.
Founders shouldn’t have to spend weeks making pitch decks, prepping for Zoom calls, or begging for warm intros. That’s the old way.
We need a new approach. A faster, fairer, more open model.
Blockchain enables that.
Crypto isn't just about speculation anymore.
It’s becoming the default capital layer for the global startup economy.
And I believe this shift—from VC monopolies to permissionless capital—isn’t just coming.
It’s already here.
What We're Building with AKINDO
At AKINDO, we’re not just building a platform. We’re building the infrastructure for a new funding model—what we call the Buildathon.
Traditional hackathons and VC accelerators focus on short-term hype: pitch decks, demo days, quick wins. But Buildathons are different. They’re long-term, milestone-based builder activations, deeply embedded within the ecosystems they support.
Instead of rewarding showmanship, Buildathons reward execution.
We’ve designed a new kind of builder experience:
Builders receive funding while building, not just for pitching.
Ecosystems get real adoption—not vanity metrics.
Capital is deployed based on on-chain milestones and product traction—not pitch theater.
Buildathons are more than events.
They’re protocols for programmable innovation.
A scalable, decentralized framework that enables thousands of solo builders to get discovered, supported, and funded—without ever needing to cold email a VC.
As AI enables the explosion of new products and blockchain enables permissionless capital flows, the infrastructure to match high-signal products with capital will become the backbone of the next startup economy.
That’s what we’re building with AKINDO.
We’ve already distributed nearly $1M in grants to builders through partnerships with ecosystems like ZKsync, Mina, Aptos, Zora and more.
We’re not just replacing VCs—we’re expanding who gets to be one.
And we’re building toward a future where anyone—anywhere in the world—can fund the next breakout product with just one click.
VC is collapsing. The future of startup funding is open, on-chain, and already in motion.
Buildathon is how we get there.
Want to see how the future of startup funding is being built—live and on-chain? Follow us on X for Buildathon updates, ecosystem drops, and the next big opportunities.