- Token launches offer faster, more flexible capital raising compared to VC.
- On-chain auctions ensure fair pricing and transparency in token launches.
- Modern token launches are grounded in real utility, not speculation.
- Tokenized equity offers more liquidity and access to capital for startups.
In 2025, the landscape of startup fundraising is evolving. Instead of traditional venture capital (VC), many crypto-native companies are turning to token launches as a quicker and more flexible method of raising capital. Stephen Hess, Founder of Metaplex, shared insights into why this shift is happening and how it is reshaping the startup ecosystem. According to Hess, the shift to token launches reflects a more sustainable approach to fundraising compared to the ICO craze of 2017.
Evolution of Token Launches in 2025
The resurgence of token launches is backed by years of infrastructure development, which has made these methods more scalable and transparent. Unlike the chaotic and speculative Initial Coin Offerings (ICOs) in 2017, which were marred by high risks and scams, today’s token launches are rooted in stronger technological frameworks.
Hess notes that modern launches are built with fairness and utility in mind. “On-chain auctions and launch pools ensure that all participants get the same price, eliminating front-running and other unfair practices,” he explained. This emphasis on fairness and transparency sets today’s token launches apart from past methods.
In contrast, ICOs were plagued by technical flaws such as no clear distribution mechanisms, which allowed insiders to manipulate the system. As a result, ICOs were often criticized for their lack of transparency and fairness, leading to a massive loss of investor confidence. Modern token launches, supported by mature proof-of-stake networks like Solana, have corrected these issues. These networks allow for more efficient operations, real-time price discovery, and better scalability.
The Shift from Venture Capital to Token Launches
Crypto-native companies are increasingly opting for token launches over traditional VC funding due to several advantages. According to Hess, one of the main drivers is the speed and flexibility that token launches offer. Unlike traditional VC rounds, which are often tied to rigid timelines and approval processes, token launches allow companies to raise funds from a global pool of investors quickly.
This flexibility also allows for more control over the funding process, enabling companies to align their fundraising efforts directly with their communities.
“Token launches offer more than just capital; they align incentives with the community,” Hess said. By giving early participants a stake in the project through tokens, companies can create a more engaged and loyal customer base. This process encourages long-term growth rather than short-term speculation, which was common during the ICO boom of 2017. As tokens are issued directly to a wider range of participants, these projects become more community-driven and less reliant on institutional investors.
Token Launches and Venture Capital: A New Collaboration
While token launches are gaining popularity, this doesn’t mean that venture capital is becoming obsolete. On the contrary, Hess believes that VC firms will need to adapt to this new landscape by engaging directly in on-chain fundraising. Rather than being excluded, VCs will participate in tokenized markets, either through tokenized equity or by joining the fundraising process itself.
Hess emphasized that tokenized equity could also bridge the gap between traditional finance and decentralized finance (DeFi). This allows equity holders to gain liquidity and participate in DeFi lending programs, creating new avenues for investment. “On-chain equity issuance enhances traditional financing by enabling tokenized shares to be traded or used as collateral,” he noted.
As VC firms begin to participate in token launches, the lines between traditional and decentralized financing continue to blur, offering greater opportunities for startups and investors alike.
The Future of Startup Fundraising
Hess believes that token-based fundraising will become the default path for startups in the coming years. As blockchain technologies mature, more companies will launch their projects with tokenized models, making it easier to access global capital markets.
Hess pointed out that platforms like Metaplex are key players in this transformation. These platforms provide developers with the tools necessary to create fair and transparent token launches, reducing the barriers for founders to raise capital.
The future of startup fundraising is likely to be shaped by this growing preference for tokenized models. As blockchain technology becomes more integrated into the traditional financial ecosystem, token launches could become the norm rather than the exception. This could lead to a more decentralized and accessible form of funding for startups, democratizing access to capital in ways that traditional VC methods have not been able to achieve.
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