- Hamster Kombat denounces venture capital in Web3.
- Highlights conflict between venture and community goals.
- Other industry leaders also criticized venture capital.
Venture capital (VC) is the most common form of funding in traditional tech startups. This is also increasingly true in crypto, where large investors can get controlling stakes in supposedly decentralized projects. However, not everyone agrees that this should be the case.
A popular clicker game, Hamster Kombat, recently revealed their disagreement with this model. Their recent public announcement starkly criticizes the reliance on venture capital funding within the Web3 sector.
Hamster Kombat Slams Venture Capital in Web3
Venture capital is increasingly being criticized in crypto circles. On Friday, August 10, the Telegram crypto clicker game Hamster Kombat revealed its own disagreement with VCs’ involvement in Web3. After rejecting numerous offers by venture investors, the team behind the game explained why.
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The company criticized the traditional VC model for focusing excessively on rapid financial returns at the expense of long-term growth. According to Hamster Kombat, “too many Web3 projects have built audiences only to use them as exit liquidity for their venture capital backers,” stating that this has become the norm.
“Instead of creating innovative projects that generate real value and revenue, companies often focus on making a convincing pitch to secure funding, spend it on marketing, conduct an airdrop or even a public ICO, and then walk away—leaving users holding the bag.”
This criticism reveals a growing concern that venture capital often does not align with the best interests of the users and the long-term health of technology projects.
Venture Capital Under Fire by Web3 Leaders
Before Hamster Kombat, multiple industry leaders expressed their skepticism about Web3. For one, Jack Dorsey, Bitcoin maximalist and former CEO of Twitter, took shots at Web3 for its increasing centralization in the hands of venture capital.
Dorsey’s criticism extends to major VC firms like Andreessen Horowitz (a16z), which has made significant investments in Web3. Following his criticism, Marc Andreessen, co-founder of a16z, blocked Dorsey on Twitter. At the same time, Elon Musk, CEO of Tesla, sided with Dorsey in the discussion, questioning whether the term Web3 means anything.
Dorsey advocated Web5 as an alternative to the current model, which would use the Bitcoin network to empower individuals rather than corporations. Hamster Kombat echoed these sentiments in its latest post, calling for a shift to foundational Web3 principles. “We invite founders and builders to focus on creating profitable businesses first. Build for your community and not for the investors,” they urged projects.
On the Flipside
- While Hamster Kombat discusses the need for innovative projects that reward users, its business model and effects on users are questioned. Authorities in multiple countries denounced the game, calling it a “pyramid scheme.”
- While Hamster Kombat has valid criticism of venture backing, it is important to note that the project is in its airdrop phase. This announcement could be seen as an effort to promote the airdrop.
Why This Matters
Hamster Kombat’s criticism of venture capital highlights the need to shift towards a different business model, prioritizing long-term value over short-term gains.
Read more about the controversies surrounding Hamster Kombat:
TON’s Hamster Kombat Craze Raises Global Authority Concerns
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