4 Findings From Our Research Into Why Crypto Startups Fail

Escrow Protocol
4 min readOct 12, 2021

Up to 90% of new initiatives fail to deliver

Escrow Protocol

·3 min read·

Photo by Executium on Unsplash

Did you know that between 8 and 9 out of 10 cryptocurrency and blockchain startup initiatives fail after receiving investor funding? This number includes both legitimate business opportunities as well as the unfortunately high number of scams, rug-pulls and other problematic schemes.

At Escrow Protocol, we’re committed to helping legitimate development teams, businesses, entrepreneurs and investors succeed, and we’ve done a lot of research into this area.

As part of our ongoing commitment to educating the market, we’re going to share with you some of the findings of our research, in the hope it will help more people & their businesses succeed, while providing education for investors to make educated investment decisions.

#1. 85–90% of Crypto Startups Fail because of these reasons:

Back in 2017, when the cryptocurrency and blockchain market really started to enjoy mainstream interest and investment, Deloitte published some research and their finding was stark: of 26,000 startups in this space, 90% of them had become idle.

Since then, major figures and publishers such as Forbes and the Founder of Ethereum Vitalik Buterin have echoed this claim; indicating that whilst interest and investment has grown, success has not seen a commensurate increase.

The same research concluded that these failures are not the result of no money, and in fact there were at least one billion US dollars floating around in the industry at the time, but these reasons were:

Lack of attention — investment from venture capitalists often involves what we might call a hands-off approach, whereby they go on to invest in a project and don’t stay too close to the task at hand. This can have disastrous results for morale and the direction of the business.

Lack of speed — just ask Bitcoin how useful a first-mover advantage is in any market. There’s a reason so many products and projects are rushed out when they aren’t ready and it is clear: speed is everything. That’s why businesses value agility so highly. Teams must learn how to be quick but also dedicated and meticulous in order to have a successful launch and business lifecycle. One of the ways to do that is to develop expertise.

Lack of expertise — it is relatively clear that the cryptocurrency and blockchain industry are still seen as new propositions even a decade later, and that many skills that were seen as transferrable may not actually apply when it comes to these newer, more tech and digital-savvy entrants to the market.

This is why entrepreneurs who are experienced in successfully launching and growing blockchain-based projects are extremely valuable: a strong team is vital to any project.

#2. The market continues to boom:

If the industry was worth around $1bn in 2017, can you guess how much it is today?

CNBC reports that over $30bn is currently flowing into this space! As literacy around tech, digital, blockchain and cryptocurrencies has improved, the appeal of investing has continued to grow, but as we’ve seen above, money doesn’t solve everything.

#3. There is a simple solution to these challenges:

By establishing a milestone-based release of funding rather than new projects receiving all the money at once, Escrow Protocol encourages the success of these initiatives by providing a much-needed focus on resources and agility.

#4. There are complex solutions to these challenges, too:

The ESCROW governance token and the protocol’s crowdfunding and investing platform combines traditional investment with lucrative exercises like DeFi yield farming to minimize risk and maximise rewards for retail, angel and venture capital investors.

If you’d like to learn more about these, please read the Escrow Protocol Whitepaper and get in touch with the team here.

Follow Escrow Protocol:

  • Check out the website here
  • Join Escrow’s telegram community to stay tuned for future announcements here
  • Follow Escrow on Twitter here
  • Follow Escrow on Instagram here
  • Read our new Whitepaper here

More from Alex Boast


Writer of British Ghost Stories now available in Paperback: https://amzn.to/2y9zEGp Hire me to write your own posts on Fiverr: https://bit.ly/2Kzs4YL



Escrow Protocol

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