Focus on product value, clear documentation and strategic applications to secure blockchain funding
The Web3 funding process works best without intermediaries. When you raise capital directly, you gain three essential assets: early user feedback, industry connections and project credibility. This guide shows you how to do it.
“Build something that attracts funding by focusing on onboarding the next billion users. To make Web3 mainstream, take inspiration from what propelled the internet into the mainstream. Investors look for ideas that scale to billions, not just thousands or millions, focus on solutions that drive mass adoption and solve real-world problems,” said Reem Chahrour, The Graph Foundation Partnerships Lead, in an email statement.
Foundation Setup
Start by building a working prototype that solves a real problem. Your MVP needs basic functions and core features running on a testnet environment. Prioritize clean, well-commented code in an open-source repository to show your technical skills to potential investors.
Documentation acts as your project’s backbone. Structure your architecture overview to detail network topology and smart contract interactions. Map out your API specifications with endpoint descriptions and authentication methods. For smart contracts, explain functions, gas optimization and security measures you’ve taken.
Build your community through direct engagement in Web3-focused channels. An effective strategy combines personal team participation in technical discussions, regular development updates and active problem-solving in the community spaces.
Validation Phase
Team members can share their work progress through blog posts or social media updates. A developer explaining a technical solution or a designer showing UI evolution adds real value for the community and shows the team’s expertise.
First community members often become your strongest supporters. These tech enthusiasts and early adopters provide invaluable feedback and spread the word about your project. Consider creating special roles or access levels for these early contributors – they’re investing their time in your project before others see its potential.
Set up clear feedback channels and track specific metrics like daily active users and feature usage. Keep response times short and document every significant user interaction. Focus on building lasting relationships with users who actively test and improve your product.
Never buy followers or use incentivized engagement services. These tactics are easy to spot and serve as red flags. More importantly, fake communities prevent you from getting real feedback and analyzing actual growth.
Pre-Funding Readiness
Before approaching investors, have your working prototype ready with at least 2-3 months of documented community engagement. Prepare metrics showing real community growth and user retention. Build a practical roadmap for the next 6-12 months based on user feedback.
If you plan to use tokens, clearly explain their utility model and document all security considerations for your smart contracts. But “Investment institutions value the actual worth of a project or a business model, not just short-term token plans,” said Alicia Kao, managing partner at KuCoin, in an email statement. “If an equitable share dividend mechanism for early investors can be designed, it can safeguard investors’ interests without a token issuance.”
“In the current cycle, more and more investment institutions are focusing on projects and teams that have the potential for positive cash flow, reliable revenue models, or profit mechanisms,” noted Kao. “As long as a project has clear positioning, reliable business logic and long-term development potential, the lack of a token issuance plan does not significantly affect its financing capability.”
Investors value execution over ideas. They want to see how you solve problems, make technical decisions and engage with users. Your preparation should demonstrate these capabilities through concrete examples and measurable results.
Keep your code strong, documentation clear and user relationships authentic. This creates a solid foundation for funding conversations.
Funding Research
“There’s a common misconception that these sorts of programs are only open to experienced developer teams with an extensive portfolio. While these attributes certainly help, what ecosystem funds are really looking for is original ideas that will help to distinguish their network from all the other L1s and L2s out there competing for market share,” said Lingling Jiang, DWF Labs Partner in an email statement.
Your Web3 project has multiple funding paths, each with unique requirements and benefits:
Ecosystem Grants come from blockchain platforms wanting to expand their networks. They fund projects adding new features, tools or apps to their ecosystem. These grants typically have clear technical requirements and milestone-based funding.
Chain-Specific Builder Programs provide long-term ecosystem support. Beyond money, you get technical resources, developer support and access to the platform’s user base. They expect strong integration with their chain.
Protocol Improvement Grants suit developers enhancing existing protocols. You need deep technical knowledge and clear plans to upgrade specific protocol functions. These grants reward proven technical expertise.
Infrastructure Grants target foundational tools other developers will use. Think data indexing, APIs, debugging tools or testing frameworks. Success depends on developer adoption and technical reliability.
Community Funds run by DAOs and protocols support user-focused applications. They want projects that bring clear value to their community. Funding decisions often involve community voting.
Web3 Hackathons mix competitive building with networking. Projects must show working demos in short timeframes. Winners gain recognition and often receive additional funding opportunities.
“Hackathons can be thought of as the precursor to grant programs,” explained Jiang. “They’re a great way to meet like-minded builders, get your name out there, and identify fellow developers you may be able to collaborate with. Your proposal needs to be something that can be realistically completed in a matter of days rather than months. It’s an ideas factory, so the real work you do lies less in the code and more in the concept.”
Accelerator Programs help refine products and reach users. They provide structured guidance, technical feedback and industry connections. Most require relocation and full-time commitment during the program.
Foundation Grants support core protocol research and development. They need detailed technical proposals and regular progress reports. These grants focus on fundamental blockchain improvements.
Web3 VCs look for projects with strong growth potential. They assess your technical capability, market opportunity and team expertise. Most expect future token or equity returns.
Preparation For Applications
Your pitch materials need to show deep problem understanding and solution value. Start with market analysis: define the problem size, current solutions and their limitations. Then explain your technical approach and why it works better. Use real metrics from your MVP and actual user feedback to prove your points.
The application package builds on your pitch with specific details. Map out your development stages with clear timelines. Break down the technical architecture to show you’ve solved key challenges. Present your team’s expertise through past projects and technical achievements. Show how you’ll use the funding with detailed budget plans.
Your presentation deck must tell a compelling story. Start with a working demo or detailed mockups that investors can explore. Give them access to your code repository so technical teams can review your work. Use clear diagrams to explain complex architecture. Back up your growth potential with user metrics and market research. Present a solid monetization model based on real usage patterns.
The data room stores all supporting documentation. Include background verification for team members, legal structures and contracts. Add user agreements and IP protection details. Store your smart contract audits and security testing reports. Keep community metrics updated with growth trends and engagement levels.
Your demo version showcases technical execution. Make core features work smoothly with a clean interface. Handle errors gracefully and monitor performance. Deploy to testnet for easy testing. Write clear setup instructions so investors can try everything themselves without technical support.
Keep updating all materials with new metrics and development progress. Each revision should make your funding case stronger through concrete achievements rather than promises.
Active Fundraising
“Once you start fundraising, it becomes your primary focus until you close. Fundraising isn’t a process you drag out over six months; it thrives on momentum. A clear timeline compresses decision-making and builds urgency.” said Yarden Shechter, CEO at Othentic Labs, in an email interview.
“Organize your investor outreach strategically,” advised Shechter. “Categorize investors into tiers based on relevance and potential. Use initial meetings with lower-tier investors to test your pitch and refine it based on feedback. Record all questions and iterate quickly. By the time you meet with top-tier investors, you’ll be more polished and prepared.”
Submit applications in batches, prioritizing programs that match your project stage. However, don’t rely solely on formal applications. “After many attempts, I learned that people reading these applications aren’t even aware of the protocol and team applying, but this is actually more important than any other information,” said Vlad Goncharov, CEO at Eonian. For each important application, establish direct contact and maintain it: “It took a few weeks of periodic follow-ups to ensure no one forgot about our application. Without constant notifications, managers can easily forget about a project, even if it’s a perfect fit.”
Send bi-weekly updates to all active applications showing development progress, user growth and community achievements. Quick responses and regular updates prove you can execute consistently.
Build relationships during the process. Join ecosystem events where your target funders participate. Talk to teams who received funding – their insights help avoid common mistakes. When funders see you active in their community, your applications gain extra weight.
Adapt your strategy based on results. If technical feedback shows up repeatedly, improve that part of your product. If user metrics raise questions, run experiments to get better numbers. Every rejection gives you data to strengthen future applications. Use this feedback loop to improve your project’s funding appeal.
Managing Success
Break down your roadmap into monthly milestones. Link each milestone to specific metrics: user numbers, feature launches or technical upgrades. This granular tracking helps spot delays early and adjust plans before issues grow.
Send investors clear monthly reports. Include key metrics, development updates and upcoming goals. Explain problems you’ve found and your solutions. Show how user feedback shapes your decisions. Raw data matters more than narrative – let your progress speak through numbers.
Scale your development process as funding arrives. Add team members to cover skill gaps. Set up proper code review and testing systems. Create documentation standards for new developers. Keep your repository clean and processes clear as the team grows.
Start planning your next funding round three months after receiving money. Analyze which metrics investors watch most closely. Build features that improve these numbers. Document every win and lesson learned. Use current investor feedback to shape your next pitch. Your existing backers can lead to new funding sources – keep them updated on your growth plans.