Disrupting Early-Stage Investing: Why Blockchain Can Unlock Founder Liquidity
Venture Capital was supposed to fund the future. Instead, too often it traps founders, employees, and early backers inside a system that can take a decade or more to return a dollar. Rafe Furst, Chief Strategy Officer of The Crypto Company, argues that the deepest flaw in VC is a structure built around delayed liquidity, misaligned incentives, and early-stage bets.
TAMPA BAY, Fla., June 17, 2026 /PRNewswire/ -- Venture capital is not slowing down, it is concentrating. The number of active U.S. VC firms fell from 8,315 in 2021 to 6,175 in 2024, while more than half of the $71 billion raised by U.S. venture firms last year went to just nine players. On this episode of Disruption Interruption, host Karla Jo Helms (KJ) speaks with Rafe Furst, World Series poker champion, five-time founder, bestselling venture-capital author, and Chief Strategy Officer of The Crypto Company, about why the traditional 10-year lockup model is breaking early-stage investing, why VC incentives have drifted away from true company building, and why blockchain may finally offer founders and investors a path to liquidity. As Furst puts it, "The biggest structural problem with VC is there's no liquidity."
Why Venture Capital Keeps Missing
Furst's core argument is that Venture Capital no longer behaves like true Venture Capital should. Too many firms now approach early-stage investing less as a genuine commitment to founders and more as a strategic placeholder. They view it as a low-cost way to preserve the option to invest bigger once the risk has already been reduced. "They're looking to buy a lottery ticket to be able to deploy capital much later on", Furst says. The result is a market where the earliest builders still absorb the most uncertainty, but do not always receive the deepest alignment or support.
That misalignment gets worse because the asset class is unforgiving. Nine out of ten early-stage companies will still fail, while the winners can take 10 years or more to generate liquidity. According to the Wall Street Journal, that delay is not theoretical: more than 90% of 2021 venture funds had produced zero distributions as of mid-2024, underscoring how long capital can stay trapped in the system. In his words, "It's just a lifetime. It's just untenable. It doesn't work."
This is where incentives begin to warp. Instead of committing to one clear strategy, either deep hands-on conviction at the earliest stage or broad high-volume early-stage allocation, many firms try to split the difference. Furst says that this middle ground creates the wrong behavior: less patience, weaker founder alignment, more pressure to control outcomes, and lower returns than the asset class should be capable of producing. His critique is not of VC in principle, but of a version that no longer matches the realities of early-stage risk or the founders it claims to support.
Blockchain Can Bring Liquidity Back to Innovation
Furst believes the unlock is liquidity. That is why he sees blockchain not as a side bet, but as the logical next evolution of venture finance itself. His view lands at a moment when even top-tier firms have been rethinking the traditional venture structure and its long lockup periods, according to Sequoia Capitals. Early public markets can be compared to a form of equity crowdfunding that originally allowed capital formation and liquid ownership to coexist before regulation, and market abuse changed the landscape. "Blockchain now offers a new version of that missing bridge," Furst says. "The future of venture capital is through decentralized technologies, Web3, crypto, and blockchain."
That thesis is now shaping The Crypto Company's next move. The company has acquired the technology behind a new layer-one blockchain and cryptocurrency called Frame, which Furst describes as a unifying liquidity and interoperability layer across fragmented crypto ecosystems. His analogy is the interstate highway system: local economies can thrive on their own, but real commerce accelerates when movement between them becomes seamless. In that sense, Frame is meant to help separate blockchain economies interoperate, transact, and share liquidity more effectively.
For Furst, the opportunity is only growing as AI and blockchain converge. He says AI agents are already transacting on-chain because they cannot use the traditional banking system the way humans do, and he believes that trend will accelerate. His advice to founders is not to wait for certainty, but to position themselves early. "The way to not get swept away is to get in front of the wave."
Links
Disrupting Venture Capital: Why the 10-Year Lockup Is Dead with Rafe Furst
Disruption Interruption is the podcast where you will hear from today's biggest Industry Disruptors. Learn what motivated them to bring about innovation and how they overcame opposition to adoption.
LinkedIn: https://www.linkedin.com/in/rafefurst/
Company Website: https://www.thecryptocompany.com/
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About Rafe Furst
Rafe Furst is Chief Strategy Officer of The Crypto Company, a five-time founder, investor, and longtime builder at the intersection of early-stage finance, emerging technology, and market design. In the episode, he traces his path from advanced study in artificial intelligence at Stanford and early web entrepreneurship in Silicon Valley to angel investing, poker, and blockchain-based venture infrastructure. Publicly, he is also known as a World Series of Poker champion and as the author of a bestselling book on venture capital. Today, his work is focused on solving what he sees as venture capital's deepest structural flaw: the absence of liquidity for founders, employees, and early backers, and the role blockchain can play in fixing it.
About Karla Jo Helms
Karla Jo Helms is the Chief Evangelist and Anti-PR® Strategist for JOTO PR Disruptors™. Karla Jo learned firsthand how unforgiving business can be when millions of dollars are on the line — and how the control of public opinion often determines whether one company is happily chosen, or another is brutally rejected. Being an alumnus of crisis management, Karla Jo has worked with litigation attorneys, private investigators, and the media to help restore companies of goodwill into the good graces of public opinion — Karla Jo operates on the ethic of getting it right the first time, not relying on second chances and doing what it takes to excel. Helms speaks globally on public relations, how the PR industry itself has lost its way, and how, in the right hands, corporations can harness the power of Anti-PR to drive markets and impact market perception.
References
- Primack, D. (2021, October 26). Scoop: Sequoia Capital just blew up the VC fund model. Axios. axios.com/2021/10/26/sequoia-capital-fund-venture-capital-model
- Chernova, Y. (2024, August 16). More than 90% of 2021 venture funds have had zero distributions thus far, report shows. The Wall Street Journal. wsj.com/articles/more-than-90-of-2021-venture-funds-have-had-zero-distributions-thus-far-report-shows-32b0348f
- Financial Times. (2025, January 1). Number of US venture capital firms falls as cash flows to tech's top investors. ft.com/content/7a787423-9466-4e55-8c0e-8811cfe44dd3
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