Venture Capital in Crypto Valley: How Switzerland's Blockchain Startups Raise Funding

The Crypto Valley Funding Ecosystem

The Swiss blockchain startup funding ecosystem has matured significantly since the 2017 ICO boom. What began as a single dominant fundraising mechanism — the token sale — has evolved into a multi-channel ecosystem with distinct instruments for different company stages, legal structures, and investor types.

Funding in Crypto Valley flows through four primary channels: equity VC investment (in AGs, GmbHs, and foundation-adjacent companies), token fundraising (via SAFTs, token sales, and community rounds), non-dilutive grant funding (from protocol foundations), and hybrid structures that combine equity and token economic exposure. Each channel has its own Swiss legal framework, tax treatment, and investor base.

The 2024 CV VC Top 50 Report confirmed that Crypto Valley captured CHF 556 million in VC funding across 56 deals — an 8% year-on-year increase, outpacing global blockchain funding growth of 3%. The ecosystem’s funding base has diversified from pure token speculation toward institutional VC investment in revenue-generating companies, a shift that reflects both the maturing of the sector and the increasing involvement of traditional Swiss institutional investors.

The VC Ecosystem: Who Invests in Crypto Valley

CV VC: The Anchor VC

CV VC AG — founded in 2018 by Mathias Ruch, Marco Bumbacher, and Ralf Glabischnig — is Crypto Valley’s most established blockchain-specialist venture capital firm and the institutional backbone of the ecosystem’s early-stage funding infrastructure. CV VC’s dual role as a VC fund and operator of the CV Labs accelerator makes it the primary on-ramp for institutional capital into early-stage Crypto Valley companies.

CV VC has invested in 100+ companies across its funds, with a portfolio valued at approximately $890 million. Its annual Top 50 Report — presented at Davos — is the definitive annual benchmark for the ecosystem’s performance. The firm’s deal flow access, driven by its deep CVA network and CV Labs accelerator relationships, gives it visibility into a broader share of Crypto Valley startups than any other investor.

For founders, CV VC’s involvement signals ecosystem credibility — a validation that has secondary effects on subsequent funding rounds, banking relationships (Sygnum and AMINA both view CV VC portfolio company status as a positive signal), and partnership development.

b2venture: The Swiss Tech VC with Blockchain Exposure

b2venture (formerly btov Partners) is a Swiss-German VC firm managing approximately €600 million across multiple funds, with a technology investment focus that includes blockchain and digital assets. b2venture operates differently from CV VC: it invests across European tech sectors, with blockchain representing a meaningful but not exclusive portion of its portfolio.

b2venture’s crypto portfolio includes investments in infrastructure-layer blockchain companies, crypto fintech, and DLT applications. The firm’s multi-sector perspective — and its LP base, which includes European family offices and institutional investors — provides a bridge between traditional Swiss VC capital and Crypto Valley deal flow.

For blockchain founders seeking capital from investors with both crypto-native and traditional tech sector expertise, b2venture represents an alternative to the purely blockchain-specialist VCs. Its portfolio construction approach — typically 15-30% of a given fund in digital asset-related investments — reflects Swiss institutional investors’ appetite for diversified tech exposure that includes blockchain without being exclusively focused on it.

Lakestar: European Tier-One Coverage

Lakestar, the European VC firm founded by Klaus Hommels, has made selective investments in blockchain infrastructure companies with ties to the Crypto Valley ecosystem. While Lakestar is not a blockchain-specialist fund, its investments — including in companies building on Polkadot and in European crypto exchange infrastructure — demonstrate that tier-one European generalist VCs are participating in Crypto Valley deal flow.

Lakestar’s participation in blockchain rounds is significant for what it signals: deal flow has been sufficiently strong and exit-visible for top-quartile European VCs — whose reputation rests on disciplined portfolio construction — to build material positions. Lakestar’s involvement in a round is a strong quality signal for Swiss blockchain founders raising Series B and later-stage capital.

Polychain Capital: US Crypto-Native VC with Swiss Connections

Polychain Capital, one of the oldest and largest crypto-native US VC firms, has significant portfolio exposure to Crypto Valley ecosystem protocols. Polychain was an early investor in Polkadot (through the 2017 token sale), invested in DFINITY, and has maintained active relationships with the Swiss ecosystem through its investments in Zug-adjacent protocol foundations.

Polychain does not maintain a permanent Swiss office, but its investment team’s regular presence in Zug — at CV Summit, the World Economic Forum in Davos, and in direct meetings with portfolio companies — makes it functionally part of the Crypto Valley institutional investor network. For protocol-layer blockchain projects (not application-layer startups), Polychain represents a significant potential capital source alongside the Swiss-domiciled VCs.

Andreessen Horowitz (a16z) Crypto

a16z crypto — the crypto-focused fund within Andreessen Horowitz — has portfolio exposure to multiple Crypto Valley foundations, including investments in protocols with Web3 Foundation grant relationships and direct participation in token rounds from Zug-registered foundations. a16z’s crypto fund manages approximately $7.6 billion across multiple vintages and is the largest pure-play crypto VC globally.

a16z does not participate in Swiss-domiciled equity VC (its primary instrument is token-adjacent investment), but its participation in token rounds from Zug-based foundations — and its ability to provide US market access and introductions for Swiss protocol teams — makes it a relevant capital partner for Crypto Valley’s protocol layer.

Token Fundraising Under Swiss Law

SAFT: The Swiss Legal Treatment

The Simple Agreement for Future Tokens (SAFT) is a contractual instrument through which investors provide capital in exchange for the right to receive tokens when a network launches. SAFTs were widely used in 2017-2018 as a mechanism for raising pre-sale capital for token projects while deferring the regulatory classification of the tokens to the point of network launch.

Under Swiss law, a SAFT is a contractual claim against the issuing entity — typically a Swiss Stiftung or AG — for the delivery of tokens at a future date. The Swiss law treatment of SAFTs depends on:

Issuer legal form: If the SAFT is issued by a Swiss AG, the SAFT represents a contractual right that may have securities law implications depending on whether it constitutes an investment instrument under FinSA. If issued by a Swiss Stiftung, the SAFT is a contractual claim against the foundation — with different enforcement characteristics given that foundations do not have shareholders who can be sued for company obligations.

Token classification at delivery: The regulatory treatment of the eventual token delivery depends on FINMA’s token classification analysis at the time of network launch. If the delivered tokens are asset tokens (securities), the SAFT was effectively a forward sale of securities — with retroactive implications for the original offering.

FTA (Federal Tax Administration) treatment of proceeds: The FTA has issued guidance clarifying that token sale proceeds received by Swiss foundations are not automatically taxable income — they may be treated as capital contributions to the foundation’s purpose. However, the precise treatment depends on the nature of the relationship between the foundation and the tokens: if the tokens give holders rights against the foundation, the proceeds may constitute taxable liabilities.

In practice, most post-2020 Crypto Valley token fundraises have moved away from SAFTs toward direct token sales conducted through the Web3 Foundation or similar grant-funded structures, or toward more hybrid equity-plus-token structures that provide both company equity and token allocation.

Swiss AG Equity with Token Allocation

The most institutionally common hybrid structure in Crypto Valley is a Swiss AG (or GmbH) equity investment with a contractual right to receive tokens from the associated foundation at network launch. This structure separates the company’s equity (held by founders and equity investors) from the protocol’s token economics (managed by the foundation) while providing equity investors with economic participation in token upside.

Under Swiss corporate law (Obligationenrecht, OR):

Convertible notes (Wandeldarlehen): Swiss law permits convertible notes in which a lender’s loan converts to equity at defined terms. Crypto Valley founders have used convertible notes for early-stage rounds where valuation is uncertain — the note converts to equity at the next priced round, often with a discount or cap.

Convertible equity instruments: Swiss law also accommodates Simple Agreement for Equity (SAFE)-equivalent instruments. These have become the standard early-stage instrument for Crypto Valley startups since 2020, providing speed of execution (no immediate share issuance, minimal statutory formalities at initial investment) with defined conversion mechanics.

Token allocation side letter: The contractual right to receive tokens from a foundation is typically documented as a separate side letter to the equity investment. The side letter’s enforceability depends on the relationship between the AG and the foundation — if they are genuinely independent entities, the foundation is not obligated by the company’s promises.

Token Sales: Direct Community Rounds

For protocol-stage projects (those launching new blockchain networks), direct token sales — through community rounds, initial DEX offerings (IDOs), or launchpad mechanisms — remain a viable primary fundraising mechanism. Under Swiss law:

Utility tokens: A token that provides access to a specific, already-functional service at launch is a utility token under FINMA’s classification. Utility token sales do not require securities registration, making them the cleanest fundraising instrument for Swiss protocol projects where the network is live at the time of the sale.

Asset tokens: A token that provides investment-like rights — revenue sharing, governance over treasury, convertible claims — is an asset token. Asset token sales require compliance with Swiss FinSA (prospectus requirements for public offerings) and may require the involvement of a FINMA-licensed securities dealer. Asset token offerings in Switzerland are therefore more institutionally complex than utility token offerings.

Payment tokens: Pure payment tokens (with no utility or investment rights) can be sold without securities regulation, but are subject to AMLA requirements for intermediaries who facilitate their sale.

Grant Funding: The Non-Dilutive Capital Stack

One of Crypto Valley’s most distinctive features compared to other VC ecosystems is the availability of substantial non-dilutive grant funding through the major protocol foundations registered in Zug. For Swiss blockchain companies building on or adjacent to these protocols, grants can constitute a material portion of early-stage funding.

Web3 Foundation Grants

The Web3 Foundation grants programme has disbursed $75M+ to 750+ grantees. Grants range from CHF 10,000 for small tooling improvements to multi-million-dollar research grants for foundational cryptographic work. Key characteristics:

• Milestone-based payment — grants are not upfront capital but tranched payments upon delivery
• No equity or token dilution — grants are pure payments for defined deliverables
• Public application process — all applications are submitted via GitHub and are publicly visible
• Technical focus — grants prioritise work that improves the Polkadot/Substrate/Web3 protocol stack

Ethereum Foundation Ecosystem Support Program (ESP)

The Ethereum Foundation ESP programme funds projects that improve the Ethereum ecosystem — protocol research, client development, tooling, security, and education. ESP grants are available to global applicants but have historically been weighted toward technically rigorous projects rather than commercial applications.

For Crypto Valley companies, Ethereum Foundation ESP grants provide both capital and the credibility that comes from foundation endorsement. An ESP grant-holding company signals protocol-level relevance that influences subsequent investor conversations.

Cardano Foundation and Catalyst

The Cardano Foundation (Zug) and IOG’s Catalyst programme fund development of the Cardano ecosystem. Catalyst uses a decentralised governance model — ADA holders vote on funding proposals — which provides a community-validated funding mechanism rather than foundation discretion. Catalyst rounds have funded hundreds of projects with a total of tens of millions of dollars in ADA-denominated grants.

Solana Foundation and NEAR Foundation

The Solana Foundation and NEAR Foundation — both registered in Zug — operate grants and ecosystem development programmes for their respective ecosystems. For startups building applications on Solana or NEAR, these foundations are primary capital sources at early stages before commercial revenue is achievable.

Typical Swiss Blockchain Startup Funding Stages

Pre-Seed (CHF 50K – CHF 500K)

The pre-seed stage in Crypto Valley is primarily funded through:

• Web3 Foundation, Ethereum Foundation, or protocol-specific grants (for protocol-adjacent projects)
• Swiss startup accelerators including CV Labs, Kickstart Innovation, and the Innosuisse grant programme (Swiss federal innovation support)
• Angel investment from Crypto Valley ecosystem members (protocol founders, successful token holders, early Crypto Valley employees)

At pre-seed, Swiss legal structure matters: establishing a Swiss AG (minimum CHF 100,000 capital for a regular AG, or CHF 20,000 for a GmbH) provides the institutional credibility for banking relationships and regulatory engagement. The alternative — operating as an unincorporated project — creates banking access problems that can block development.

Seed (CHF 500K – CHF 3M)

Seed-stage Swiss blockchain companies primarily raise from:

• CV VC (first institutional cheque in many Crypto Valley companies)
• Swiss family offices with direct blockchain investment mandates
• Protocol foundation grants scaled to significant infrastructure projects
• Convertible notes from ecosystem angels converting to equity at the seed round

Valuations at seed-stage Crypto Valley companies reflect the protocol’s network metrics (active users, TVL, transaction volume) rather than traditional revenue multiples — a valuation methodology that requires investors with blockchain-native assessment capabilities.

Series A (CHF 3M – CHF 20M)

Series A in Crypto Valley involves both Swiss and international institutional capital:

• b2venture, Lakestar, and European generalist VCs with blockchain exposure
• US and Asian blockchain-specialist VCs (a16z, Polychain, Hashkey Capital)
• Swiss institutional co-investors (family offices acting alongside VC funds)
• Strategic investment from Sygnum Bank or AMINA Bank (both have invested in portfolio companies)

Series A-stage due diligence in Crypto Valley focuses heavily on token economics — specifically, whether the company’s equity value is decoupled from or correlated with the associated protocol’s token price, and what the equity investor’s rights are in scenarios where token value captures most of the project’s economic value.

Growth (CHF 20M+)

Growth-stage Crypto Valley companies represent the ecosystem’s most mature investment opportunities. Notable recent transactions:

• Sygnum Bank’s $98 million 2024 round (institutional growth capital for FINMA-licensed bank)
• Celestia’s $100 million raise (largest individual round in the 2024 CV VC Top 50 Report)
• TON Foundation’s $48 million raise

At growth stage, Swiss blockchain companies attract global institutional investors including Tiger Global, SoftBank Vision Fund, and sovereign wealth funds — capital sources that are not Crypto Valley-specific but that have followed the sector into Switzerland as valuations have scaled.

Due Diligence: The Swiss Investor Perspective

Swiss institutional investors conducting due diligence on Crypto Valley blockchain investments address several Swiss-specific factors beyond standard VC due diligence:

FINMA authorisation status: Is the company operating within FINMA’s regulatory framework? Does it have the appropriate licence (banking, securities dealer, SRO-VQF membership, fund authorisation) for its activities? Unlicensed regulated activities create existential regulatory risk.

Legal structure coherence: Is the relationship between the company (AG/GmbH) and any associated foundation (Stiftung) clearly documented and governed? Is intellectual property ownership clearly allocated? Are token economic rights legally enforceable against the entity that holds the token treasury?

Token economic design: Does the token economic model align the interests of founders, investors, and token holders? Does value accrue to equity or to tokens — and in what proportion? Swiss convertible instruments often need to address this explicitly to avoid disputes.

Banking access verification: Can the company open and maintain CHF accounts with FINMA-licensed institutions? Banking access remains a practical constraint — even in 2025, many Swiss banks decline crypto company accounts without the credibility signals of FINMA regulatory engagement and recognised investor participation.

FTA tax treatment: Has the company obtained clarity from the Federal Tax Administration on the tax treatment of its token issuance, token treasury, and any token distributions to founders? Swiss tax treatment can significantly affect the economics of token-based compensation structures.

Frequently Asked Questions

What is the most common VC investment instrument for Swiss blockchain startups? Post-2020, the most common early-stage instrument is a Swiss-law convertible equity instrument (analogous to a US SAFE) with a separate side letter for token allocation rights from the associated foundation. This structure separates equity economics (held by investors) from token economics (managed by the foundation) while providing investors with defined conversion mechanics and contractual token rights.

Which Swiss VCs are most active in blockchain investments? CV VC is the most active blockchain-specialist VC with 100+ portfolio companies. b2venture is the most active Swiss generalist VC with material blockchain exposure (typically 15-30% of a given fund). For protocol-layer investments, Polychain Capital and a16z crypto are the most significant international VCs with Swiss ecosystem exposure. Lakestar participates in later-stage growth rounds for Swiss blockchain companies with clear institutional traction.

How do Web3 Foundation and Ethereum Foundation grants work for Swiss startups? Both foundations provide milestone-based grant payments for defined technical deliverables — no equity, no token dilution. Applications to the Web3 Foundation are public (submitted via GitHub) and subject to technical review. Ethereum Foundation ESP grants are application-based with a separate technical review process. Grants are particularly valuable at pre-seed and seed stages, providing capital and foundation endorsement that signals protocol-level credibility.

What are the Swiss tax implications of token fundraising? The Federal Tax Administration (FTA) treats token sale proceeds based on the nature of the tokens and the issuer’s legal form. Proceeds received by a Swiss Stiftung for the issuance of utility tokens may be treated as capital contributions to the foundation’s purpose (not immediate taxable income) if structured correctly. Asset token proceeds may have different treatment. SAFT structures have specific FTA considerations at both the initial investment stage and the token delivery stage. Swiss tax counsel is essential for any Swiss token fundraise above CHF 500,000.

How does Swiss law treat convertible notes for blockchain startups? Swiss law (Obligationenrecht, OR) recognises convertible loans (Wandeldarlehen) as standard contractual instruments. A convertible loan converts to equity in the company at defined terms (typically at the next priced round, with a discount and/or valuation cap). The formalities for converting a loan to equity in a Swiss AG require a notarised capital increase resolution — more formal than US SAFE conversion mechanics — but the instrument is legally well-established.

Internal Links

• CV VC: Crypto Valley’s Institutional Venture Capital Firm
• Crypto Valley Investment Guide: The Institutional Perspective
• Funding Tracker: Crypto Valley Investment Activity
• Web3 Foundation: The Polkadot Governance Engine
• Ethereum Foundation: How Zug Became the Home of the World’s Second Blockchain
• Swiss Blockchain Regulation in 2025: FINMA’s Updated Framework
• Crypto Valley Companies 2024: The Definitive Ecosystem Report