The Funding: Why big crypto VCs are joining Cobie’s Echo

Earlier this year, Echo — the angel investing platform founded by popular crypto trader Jordan Fish, better known as Cobie — publicly called out what it described as growing "hostility" from some venture capital firms. Now, some of the biggest crypto VCs are joining Echo and helping their portfolio companies raise through it. I spoke to VCs and Cobie to understand what's driving the shift.In January, Echo said some VCs had tried to stop founders from offering better terms to the Echo community, or to block community sales altogether unless done as late-stage, high-valuation launches. That pushback likely didn't come from top-tier firms, but from those struggling to get into deals — as I reported at the time, and as several experts reiterated. "For a certain type of 'follower' VCs, crowdfunding platforms like Echo are absolutely an existential risk," said Alexander Pack, co-founder and managing partner at Hack VC. "The reason is that while tech investing overall is a positive-sum game, allocating capital is a zero-sum game." In other words, if projects carve out room for community raises, someone else gets cut.While top VCs were broadly supportive of Echo earlier, they're now formalizing that support. In recent weeks, Paradigm, Coinbase Ventures, Hack VC, 1kx and dao5 have all created groups on the platform — marking a shift from quiet alignment to active participation.These funds aren't using Echo to find deals — they're backing projects the usual way, then helping founders raise from the community through the platform. In most cases, that means offering a portion of their allocation to retail, or encouraging founders to run a separate community round alongside the VC raise. "We encourage our portfolio companies to raise outside capital on Echo, ideally on economic terms that are as or more favorable than our own," said Pack. "In an ideal world, we want every single one of our protocol or network investments to do a crowdfunding raise before they launch their token."Echo isn't a competitor to VCs — it's a coordination tool, said Lasse Clausen, founding partner at 1kx. "Founders still seek high-signal, value-add investors," he said.VC participation is also helping Echo deals stand out. Rob Hadick, general partner at Dragonfly, said that in recent months, most projects on Echo or its competitor Legion haven't sold out their allocations — except those backed by top VCs, which sell out in minutes. He said that kind of backing helps solve the information gap for users and remains the strongest signal of how well a deal will do on the platform — something that's been true throughout the history of crowdfunding.Echo's data reflects the same pattern. Cobie said users are "most confident" when a "big name or high-signal VC" is involved. Since projects can't list themselves on Echo and need to be endorsed by a group lead, VCs with Echo groups can now sponsor sales directly — often without taking carry, he said. Carry — short for carried interest — is a cut of the profits that an investor or fund manager earns if the investment does well.Activity varies across funds, but momentum is building. 1kx hasn't brought any deals to Echo yet but expects to soon, said Clausen. Pack declined to say how many deals Hack VC has supported. CMS Holdings, meanwhile, which joined Echo early on, has been more active — its group, 4 Ventures, has done around 20 deals so far, said Dan Matuszewski, the firm's co-founder and principal. Dealflow on Echo "started very hot, then got quiet and is picking up again," he said, adding that Echo activity tends to track broader altcoin interest.Echo was never meant to replace VCs — it was built to give retail investors access to the kind of early-stage deals professional investors see. Bringing in more reputable funds doesn't dilute that vision. If anything, it strengthens the platform by increasing deal quality and user confidence, Hadick said.That quality is what ultimately sustains platforms like Echo. "If Echo wants to be a business and not just a flag for a mission, it needs stable capital pools and prestige to attract real deals," said Lex Sokolin, co-founder and managing partner at Generative Ventures. "VCs also are important in making companies actually succeed."To subscribe to the free The Funding newsletter, click here.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.