How do venture capitalists make money from their investments?

Venture capitalists (VCs) make money from crypto investments through several methods. When they invest early in cryptocurrency projects or blockchain companies, they receive equity stakes or tokens. If the project succeeds and grows in value, VCs profit by selling their shares at higher prices—potentially earning returns of 10x, 100x, or more. They may also exit through acquisitions when larger companies buy startups, or initial public offerings (IPOs). VCs typically invest in multiple projects, knowing some will fail but betting that successful ones will generate enough returns to cover losses and generate profit. They earn management fees from investor funds and take a percentage of profits, usually 20%, called 'carried interest.' Success depends on identifying promising early-stage projects before mainstream adoption.