Terra's Collapse Is a Hard Lesson for Sloppy Crypto VCs and Gullible Retail Investors

cryptonews.com:

It’s not the greatest time to be a venture capitalist (VC) in crypto. Many of them have seen both the value of their investments and reputation plummet, as projects they were actively promoting, such as Terra, failed spectacularly, hitting the whole crypto industry. 

In previous months and years, the fact that one or more VC funds had invested in a project was usually enough to send any corresponding token surging. In contrast to these heady days, there are now serious question marks hanging over the wisdom and shrewdness of VC funds, which retail investors have often used as models for their own investment decisions (judging by rallies after funding rounds).

However, figures working within the crypto industry claim that, in the aftermath of the current crisis, VC funds will increasingly focus on conducting rigorous research and due diligence in making their decisions. And while the crypto market is likely to remain volatile and unpredictable for the foreseeable future, there should be a gradual decline in risk-taking behavior from VCs over time.

Commentators are in agreement that the reputation of crypto-focused VC funds has taken a beating in recent weeks.

“Over the last cycle, having a top-tier VC on the cap table became a stamp of approval and self-fulfilling prophecy of sorts. Unfortunately, during an era of tremendous risk-on activity and low-monetary policy, many of these VCs have found themselves losing traditional operational discipline such as risk management or portfolio construction practices,” said Anthony Georgiades, a co-founder of NFT-focused blockchain Pastel Network and General Partner at VC firm Innovating Capital.

Aside from the obvious fact that their investments have sharply dropped in value, VCs have