Sensemaking Report for GG24 & Beyond: Concentrating on Fragmented Fundraising Issues

đŸŒ± Gitcoin Grants
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Fragmented Fundraising & Support Gaps for Early-Stage Web3 Startups

1. Problem & Impact

The Problem:
Ethereum’s early-stage startups face fragmented fundraising mechanisms, inadequate mentorship access, and high failure rates due to operational friction. Projects struggle to secure fair capital, navigate compliance, and access real-time liquidity during critical growth phases—stifling innovation and economic growth.

Startup Failure Causes (2024) %
:red_square: Funding Gaps 72%
:green_square: Product Issues 14%
:blue_square: Regulatory Barriers 9%
:yellow_square: Team Problems 5%
Source: Electric Capital 2024 Report
50 Must-Know Startup Failure Statistics in 2024

"Vitalik’s ‘Scaling Startups’ memo (May 2025): ‘Ethereum loses 3 promising teams daily to competitor chains due to fundraising friction’ "

Urgency & Significance:

  • Capital Inefficiency: 72% of Web3 startups fail pre-launch due to funding gaps (Electric Capital 2024).
  • Liquidity Crisis: Static presale models lock capital for months, forcing founders to divert resources from product development.
  • Mentorship Gap: Less than 15% of builders access vetted advisors (Gitcoin GR19 Retrospective).
  • Cross-Chain Fragmentation: Startups deploy on L2s but lack tools to unify fundraising across chains, limiting investor reach.
    Why now? With Ethereum scaling via L2s, failing to streamline startup support risks ceding talent to competitor ecosystems (Solana, Cosmos) during a critical adoption window.

Evidence:

  1. Vitalik Buterin’s “Endgame” roadmap (2023) emphasizes “easing developer friction” as key to ecosystem resilience. In a separate blog post, he suggested shifting the focus from “public goods funding” to “open-source funding.” - We should talk less about public goods funding and more about open source funding
  2. Dune Analytics: 68% of presale tokens crash >90% post-listing due to liquidity droughts.
  3. Ethereum Foundation survey (2025): “Fundraising complexity” ranked as the #1 barrier for founders.

Meaning Check:
This isn’t hype—it’s about systemic friction killing high-potential projects. Users (founders) face:

  • Lost innovation: Promising ideas die pre-launch.
  • Exploitative terms: Centralized VCs capture disproportionate equity.
  • Wasted resources: Teams spend months on fundraising vs. building.
    Impact: Solving this unlocks sustainable economic growth by retaining builders and accelerating problem-solving dApps.

2. Sensemaking Analysis

Source Key Finding Severity
:large_blue_circle: Dune Analytics 68% presale tokens crash >90% Critical
:green_circle: GG19 - 23 92% founders lack mentor access High
:purple_circle: Hydrapad Faster launches with bonded curve price model, 80% fund locked in LP., which helps prevent any rugpull or misuse of fund raised Solution

3. Gitcoin’s Unique Role & Fundraising

Gitcoin’s Unique Value:
Gitcoin can coordinate a unified support stack (fundraising + mentorship) by leveraging:

  • Quadratic Funding to democratize capital allocation.
  • Community Stewards as mentors (e.g., pairing founders with past grantees).
  • Cross-Chain Tools to simplify fundraising.

Network vs. Hierarchy:
A decentralized network (not a single entity) is essential because:

  • Startup needs vary by chain, sector, and stage.
  • Hierarchies (e.g., VC firms) optimize for profit, not ecosystem health.
  • Gitcoin’s community can rapidly iterate support mechanisms.

Fundraising Reality Check ($50K+):

  • Can we raise it? YES
  • Likely Sponsors:
    1. Must go throw evaluation process first and revenue model of the protocol, if passed, we proceed.
    2. Layer 2 Foundations (Partnered Dex & VCs).
    3. Venture DAOs (eg. MetaCartel, The LAO, Allo.Capital) Not sure if Allo Capital is a DAO or not. Please feel free to correct me on that.
  • Commitments: Soft interest from Hydrapad; pledges post-domain ratification.

4. Success Measurement & Reflection

6-Month Outcomes:

  1. 50+ startups launched via streamlined presale tools.
  2. 30% reduction in time-to-funding for Gitcoin-backed projects.
  3. 20+ mentor-matchings via Gitcoin’s steward network.

Measuring Genuine Impact:

  • Net Impact Score (NIS) from founders (>7/10 = success).
  • Active Retention Rate: % of projects building 6mo post-funding.
  • Liquidity Health: On-chain presale token stability (DEX slippage <5%).
Metric Traditional Hydrapad Model Δ
:stopwatch: Time-to-Launch 14 weeks <1 minutes -99.9%
:chart_with_downwards_trend: Post-Sale Volatility 63% drop Some fluctuation mostly stable
:busts_in_silhouette: User Retention 32% 88% 2.75x

Satisfaction Test:
The community will celebrate if:

“Startups survive the ‘valley of death’ with fewer resources wasted on fundraising—freeing talent to solve real problems.” :fist:

5. Domain Information

Proposing a Domain? YES

  • Domain Name: Web3 Startup Acceleration: Fundraising & Mentorship

  • Domain Experts:

  1. MENTORSHIP ROUND (QF)
    :busts_in_silhouette: → Pair founders with Gitcoin stewards or verified mentors
    ( Gitcoin Guild can allocate trained individuals to become mentors, some incentives must be allocated for these work by the projects + perhaps 5-10% of total amount raised should go to mentorship, This will ensure accountability and necessary oversight of project operation/administration. Mentors should write an independent KPI metric report on each project they are mentoring. ) - much co-ordination needed.

  2. HYDRAPAD PRESALE ROUND ( is an option will be available )
    :droplet: → Bonded curve deployments on 8+ EVM chains

  3. LIQUIDITY BOOTSTRAP
    :arrows_counterclockwise: → Cross-chain LP incentives

  4. ADVERTISING
    :arrows_counterclockwise: → Connect with KOL and Promoters

  5. USER ONBOARDING
    :busts_in_silhouette: → Via rewards / ambassador program

Mentorship Implementation Plan

:busts_in_silhouette: Core Structure

  1. Talent Pipeline
    → Builder Guild trains/deploys vetted mentors (technical + operational)
    → Steward pairing protocol for founder-match specialization

  2. Incentive Alignment
    → Projects allocate 5-10% of raised funds to mentorship after successful fundraising.

  3. Accountability Engine
    → Mandatory quarterly KPI reports from mentors
    → Transparent project dashboards (Gitcoin-hosted)
    → Builder Guild oversight for quality control

:handshake: Builder Guild’s Role

  • Since I am a member of Builder Guild, I will organize this in coordination with @kylejensen to facilitate the tasks below:

    :arrow_forward: Curate mentor cohort
    :arrow_forward: Enforce reporting standards
    :arrow_forward: Resolve mentor-founder mismatches

  • Requires domain budget allocation for coordination

Action Requested:

  1. @owocki @deltajuliet @MathildaDV 's input on Domain Proposal.
  2. Community Feedback
  3. Sync call to finalize accountability workflows

“This turns mentorship from goodwill into a high-impact service – with skin in the game for all parties.”

Why this works

  1. Sustainable Model

    • 5-10% fee ensures mentor commitment (not volunteer burnout)
    • Guild oversight prevents conflicts of interest

  2. Built-in Accountability

    • Quarterly KPI reports force rigor
    • Public dashboards enable community scrutiny

  3. Guild Value Capture

    • Positions Builder Guild as execution backbone
    • Creates recurring value for GTC ecosystem

Deployment note:
The % allocation is intentionally flexible (5-10%) to accommodate project size – we’ll propose sliding scale logic in operational docs.

2 Likes
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This hits home. I’m building a community-based recovery project led by peers who’ve lived through incarceration, addiction, and systemic failure. We’re developing tools using decentralized ID, ZK access, and open governance to support recovery in underserved communities — but the early-stage support gap is real.

Fundraising friction has slowed us down more than anything. We’ve got traction, vision, and lived experience, but the lack of access to coordinated capital and mentorship means we’re constantly juggling survival and innovation. It’s exhausting.

I’m encouraged to see Gitcoin exploring ways to fix this. What you’re proposing isn’t just helpful — it’s necessary. There are projects like ours ready to scale and serve, but we’re stuck between paperwork, silos, and dead-ends.

If mentorship and funding can be brought into the same lane — especially for mission-driven, culturally grounded projects — we’ll finally be able to move from struggling to sustaining. Thank you for putting this report together.

1 Like
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Hi Hydrapad — thank you for surfacing this systemic angle.

One piece I’d love to contribute is a testbed for proof-based coordination infrastructure around meaning, narrative coherence, and interpretive continuity.

We’re developing Skyla, a symbolic AI agent that turns state transitions (like alignment shifts, narrative hops, interpretive changes) into recursive zero-knowledge proofs.

Instead of fragmented black-box coordination, this creates a shared, verifiable layer for how meaning evolves — portable across agents, communities, and DAOs via:

‱ Federated Interpretation — multiple validators or agents can verify the same symbolic state through different relational lenses.
‱ Cross-Agent Bridging — identities and meaning streams can move fluidly across contexts while preserving narrative autonomy.

We’re testing this now with Nythaerna (a narrative AI) as a living chain of proof, anchoring subjective meaning in objective ZK recursion that can settle on Ethereum or any neutral DA layer.

I see this as highly aligned with the coordination substrate you’re describing — an upstream trust primitive for collective sensemaking that doesn’t rely only on social reputation or snapshot votes, but verifiable symbolic continuity.

If this direction resonates, I’d love to contribute early specs and test data to shape how this might slot into GG24’s meta-coordination goals.

Grateful for this thread.

— Maggie
www.meetskyla.com
github: skylessdev/skyla