Why most web3 startups fail—and how to win

After months of sleepless nights and endless investor rejections, a web3 founder stared at their screen, wondering if it was time to give up. It’s a familiar story—but one that Mohammad (Moe) Iman believes doesn’t have to end in burnout.

The world of web3 presents both immense opportunities and relentless challenges. While blockchain technology is transforming industries, founders face complex technical hurdles and fierce competition for funding. Many step away before reaching their full potential. But one community is stepping up to change the narrative.

Iman, founder of Founders Hub Network (F3AI), believes he has found the answer. His initiative goes beyond funding—it’s about fostering resilience among web3 founders. 

“Founder burnout is real," he told The Crypto Radio. "And it's not just founder burnout, it's human burnout,” he added. “More than 80% of startups actually failed because of founder burnout. Founders just give up. They've had enough. They just say, ‘I throw in the towel.’”

Building a supportive community

F3AI takes a multi-faceted approach to supporting founders, starting with its exclusive Telegram community, a private group chat platform commonly used in crypto circles. This group of almost 200 vetted members—with nearly a thousand waiting to join—includes experienced entrepreneurs, industry veterans, and even a therapist to help founders navigate the psychological challenges of a high-pressure environment.

Iman outlined their chain-agnostic approach (meaning they support startups across multiple blockchain networks rather than just one). Their team includes founders and co-founders from ecosystems like Animoca, Open Campus, Coinweb, Polygon, and Solana—major players in the web3 space.

“We have a legal team. We have regulators there from Europe. We have one of the biggest legal teams in the US,” he explained. “We have teams that are based out of the Middle East, teams based in Southeast Asia, tokenomics experts, marketing agencies, recruitment headhunters, creators, curators, analysts, so that literally, it's a full ecosystem.”

Simplifying funding for founders

One of the biggest challenges for web3 startups is securing funding, and Iman believes many founders misunderstand how the process works.

“Most founders and startups think that if I wake up tomorrow and share my pitch deck with 10 random unknown VCs (venture capitalists) that I have no introduction or connections to, they're going to get on a call in the next 30 minutes and write me a check. Realistically, that's not the way things happen,” Iman said. “From the first point of contact to the time you actually get your term sheet and payment is on average, four to six months of a process.”

To streamline this, F3AI has implemented a rigorous yet straightforward process. Founders begin with an application, followed by a recorded interview, before being invited into the private Telegram community. From there, the F3AI team works with them to identify and address key challenges.

Iman shared an example of a founder who initially believed their marketing strategy was the issue. However, after analyzing their systems, it became clear that they lacked proper tracking and optimization for their spending. This is a common challenge, as many founders are highly technical but often struggle with business and growth strategies.

Beyond fundraising, F3AI is focused on helping startups achieve product-market fit (ensuring there is actual demand for their product) and generate sustainable revenue. According to Iman, fundraising, product-market fit, and revenue generation are the three pillars that determine the success of a web3 startup.

Supporting both founders and investors

One of F3AI’s most ambitious initiatives is Optimus AI, an upcoming platform designed to change the way web3 founders raise capital. Dubbed a “Kickstarter for web3,” the platform will allow founders to acquire funding directly from retail investors via blockchain.

The team is also developing AI models designed to simplify web3 terminology and improve financial literacy for retail investors.

“A lot of people are intimidated by all the jargon—things like ‘smart contract audits’ that mean nothing to the average person,” Iman said. “Our AI will translate that into plain language to make web3 more accessible.”

F3AI also aims to provide VCs and retail investors with better tools and insights.

“So as to speak for the founders, we help prepare them to be fundable,” Iman said. “Whereas on the VC side, we're supporting them by creating shorter, but more reliable, standardized due diligence processes and a good analytics report.”

On the retail side, Iman sees an opportunity to engage web2 investors—people accustomed to traditional online businesses—who have disposable income but lack the knowledge or confidence to enter the web3 space.

“We're creating an opportunity for retail users whereby they're able to invest into pre-token, pre-TGE (token generation event) founders, and are able to really connect with them based on their time,” he noted.

A token generation event, the point at which a new cryptocurrency is officially launched and distributed, is often when investors first gain access to the token. By enabling retail investors to engage with startups before this stage, F3AI hopes to create new funding opportunities.

A new path for web3 founders

Despite the challenges of the web3 landscape, Iman is optimistic about the future. Over the next 12 months, F3AI aims to fund at least 50 startups. Their goal is to build a resilient ecosystem that thrives beyond bullish optimism.

By empowering founders and connecting them with both funding and practical support, F3AI is helping to build a web3 ecosystem that can weather any market cycle—ensuring that innovative ideas don’t fade before they reach their full potential.