How Did This Project Get Valued at $500 Million Just One Year After it was Founded?
With Web3 Entrepreneurship boom, various projects are emerging in an endless stream. The heat of the industry continues to rise.
With the traditional Internet industry’s dividend peaking, the road to success of Web2 is no longer smooth. At the same time, the development and practice of next-generation Internet underlying blockchain technology has made the uncertain Web3 field sought after by many entrepreneurs. According to a report released by Cointelegraph Research, Web3 industry venture capital has shown explosive growth since 2021. Despite under macro conditions, the difficult bear market comes. The total capital inflow of the Web3 field in the first half of this year reached more than $30 billion, exceeding the total amount of the previous year.
All signs indicate that Web3 has become a hot spot for investment. It will create a new generation of wealth myths. However, it has always been a case of “new people laughing, but not old people crying”. The bright and shiny narrative coat shaped by the social media has been stripped away. Behind the carnival of Web3 startups is still a thorn in the face.
Web3 is still in the early stage of development and the market is chaotic. As a new startup hoping to ride the wave of change, how to find the right development direction in the mixed market environment? How to get Web3 from concept to reality? The third interview of “Where did they go after the hackathon” may give Web3 entrepreneurs/newcomers some ideas for their startups.
This interview invited Parallel Engineer @Yang Zhou, who has been developing Web3 technologies since 2017. He joined the project Parallel Finance in 2021 through the Oneblock+ community, winning awards from the Polkadot Hackathon and additional prizes from investment. Parallel has launched a fairly complete DeFi product line in just one year. He has received high funding and project valuation. Parallel achievements in a short period are the result of a good “right” development path. But looking forward, “the future is still a long way to go.”
Win at the Starting Line and Keep Moving Forward.
It goes without saying that hackathons are the gateway to growth for Web3 startups. But the point is that winning a hackathon is only the beginning of the journey. We see a lot of hackathons in every major ecosystem every year. There are many winning projects, but very few of them are successfully run after winning.
Hackathon Awards — Emerging
Parallel participated in the Spring 2021 Polkadot Hackathon. In parallel, not only did they excel in the competition, but they also received additional prizes from investment institutions.
Talking about the hackathon participation experience, Yang Zhou shared with us that in his opinion. The biggest difference between Polkadot Hackathon and other eco-hackathons is that the teams are given sufficient time to develop. The specifications of the deliverables are strictly defined. The participating teams are given sufficient time to develop a complete product, not a toy. Giving the startups technical and management support really trained a startup and gave our project a lot of exposure.
Not only did Parallel have a great performance at the Polkadot Hackathon, but after the event they built on the momentum and made the project a success. Yang Zhou shared that the most crucial and influential point of the hackathon was finding “like-minded startup partners”. The team members have confidence in the project. “It is really worthwhile to continue to do this.”
Team Rally — The First Force
It is true that seeing the right opportunity and finding the right direction …… These are one of the elements of entrepreneurship. However, the team is the core competitiveness of entrepreneurship.
The Parallel team was originally formed by a group of like-minded partners, with team members as the first force driving the development of the project. With the same beliefs and clear division of labor, the team promote the high-quality development of the project with high execution, and firmly believes in the rapidly changing Web3 environment to explore the right direction of development.
How to find like-minded startup partners in Web3? Yang Zhou suggested that everyone go to the Web3 community activities . He learned about the Polkadot Hackathon competition in the Substrate learning group of Oneblock and successfully formed a project team member from the community. In addition, he mentioned that the Web3 field is changing rapidly. It is hard to grasp some key points quickly. However, in the Web3 developer community, the community members can share information and help you understand the cutting-edge technology progress and industry information, which is helpful for developers who are new to Web3.
How Do Web3 Startups Pitch for Funding?
The development of startup projects cannot be achieved without the support of funds. Generally speaking, Web3 project financing has to go through seed and angel rounds, among which the most important for the startup team is the seed round. If you can get a more suitable investment institution in the seed round, it will help a lot in the subsequent A and B rounds.
Parallel Finance began to address the financing issues facing the project’s continued development after the end of the 2021 Polkadot Spring Hackathon. Today, Parallel has secured strategic funding from Coinbase, Section 32, and StarkWare. Parallel is backed by more than a dozen investment institutions including top investors such as Sequoia, Founders Fund, Coinbase, and Polychain. Yang Zhou shared with us Parallel’s experience in the seed funding round.
The Founder Resources
The founder of Parallel, Yubo, who was able to secure a seed round of funding from headquartered crypto capital. He has worked at Danhua Capital, Polychain Capital. He is also the founder of Octavia Capital. Yubo’s extensive network of contacts has helped Parallel to secure a successful funding round.
The founder of Parallel is excellent. He has a huge advantage in terms of networking resources. If the average entrepreneur doesn’t have many personal resources, consider finding an incubation program or startup community specifically for Web3 entrepreneurs. It can also be a critical step on the road to funding.
Demonstrate Products and Execution
Projects in this period are still basically in the idea presentation and initial development stage. The team has to focus on proving to the investors that they can make a great product and show strong execution capabilities. For example, in November last year, Parallel started to plan the liquid crowdloan project on Polkadot. Parallel demonstrated excellent project planning ability and execution to the investors. It took less than a month from the beginning of the design of the product to the launch of the product . The product achieved excellent results after the launch.
Understand the Evaluation Criteria of the Investor
Traditional Venture Capitalists browse thousands of investment projects every year and have a relatively well-developed decision mechanism for project selection in order to evaluate and filter. Generally speaking, there are similar selection criteria for Web3 startups, and startups can learn some relevant criteria in advance.
Be Clear about What Kind of Investor You Need
Understanding the background of the investment institution in advance, Yang Zhou suggests that you can try to choose some investment institutions related to the ecology of the project. On the one hand, these institutions can become a user of your product itself.
On the other hand, these investors may be very optimistic about the potential of the projects. They are willing to support the project for a long time, and even have the ability to provide a certain degree of guidance for its development.
Concept First? Product is the Core of Development.
Successfully financing is a prerequisite for the development of Parallel projects. The product is the only secret to enabling it to build on the long-term development of the ecosystem.
Web3 is a technically and conceptually viable project, and the industry has seen an influx of funding and talent to explore the feasibility of the project. Behind the attentions, it’s hard to deny that Web3 is still a concept-first field today. However, as a web3 project for commercialization, we need to make it clear that users are more concerned about the project product. High-quality products are the future of project development.
Overview of Parallel Product Development
Parallel aims to be “the Parachain that builds the head of the Polkadot ecosystem”. Nearly a year after the project was founded, it went live around April this year with seven core products.
- Liquid Staking — — Compounding high yield
- Money Market — — The only Lend/Borrow product in the ecosystem
- AMM (Automated Market Maker) — — Free asset conversion
- Liquid Crowdloan — — Liquidity of assets
- Cross Chain — — Interoperability
- DaoFi — — Stream Protocol
- Farming — — Earn income from idle Tokens
Parallel has created a one-stop platform with the most comprehensive range of DeFi products in the Polkadot ecosystem. It allows users to access the best returns at the touch of a button, without the complexities of selecting and investing in DeFi.
In particular, Money Market, a Lending Protocol product, uses innovative features to help users maximize the benefits of their assets. Its advantages of no liquidation Loan (cDOT, cKSM innovative use case), combinability (perpetual Farming function), interoperability (one click Staking+Lending), security (maintain Health value > 1) and liquidity (TVL $70 million) allow users to earn multiple compound returns with simple operation. The current product DOT liquidity exceeds 1 million and the derivative asset sDOT liquidity is nearly 1.4 million.
More about Parallel:
- Parallel App：https://app.parallel.fi/
- Parallel Medium：https://parallelfinance.medium.com
Parallel in the Future
The present achievement is not a one-day achievement, and future development still needs to chop the waves.
The product development of Parallel has not been smooth. Yang Zhou mentioned that Parallel seized the opportunity brought by the release of XCM and launched the first DOT Liquid Staking product in ecology. It attracted a large number of DOT users; while Acala, the same Polkadot ecology project, has overtaken in locking volume although the product was launched later. In response, Parallel will also make adjustments to its incentive strategy, such as adjusting Farming revenue, standardizing incentives, and cooperating with the platform to attract traffic.
One of the main reasons why startups fail is “lack of market demand”. It’s better to address product issues. It is keeping up with the market, exploring new growth points, and taking a relatively objective view, constantly reflecting on the product’s features and considering the DeFi crisis for a rainy day. We expect Parallel to continue to make breakthroughs in the future to achieve its vision of bringing DeFi to a billion people!
Ideals, Technology and Reality
Looking back at the development of the Internet, from Web1 to Web2, it has gone through a period of chaos and confusion and a period of emerging shortcomings. Finally compromised between ideals and technology to reality, Web3 forms the current Internet era. Web3 can provide a broader stage of development for aspiring Internet pioneers.
As an average entrepreneur, you should have a Web3 vision. You must see the reality of your situation, use the resources available and keep working hard for it. The founder of Parallel Finance, for example, has a strong resource background, achieved great results in terms of financing in the early stages of the project’s development. The team members have worked together to efficiently launch a complete product line. They continue to explore and improve the product, showing us the development paradigm of a good Web3 startup project.
Parallel may have already been a successful predecessor for teams just starting out / preparing for the hackathon, and a typical startup. But Parallel tells us that milestones are not the end of development. They have to face a long road ahead when they choose this unknown field. But there is no need to be frustrated. They should set small goals and achieve them one by one, the milestones on the way will give us great encouragement. The light of success belongs to everyone who explores and struggles on the way.
References:
Parallel Medium: https://parallelfinance.medium.com
Parallel Github: https://github.com/parallel-finance
About OneBlock+
OneBlock+ is the first and the largest blockchain developer community in China. At OneBlock+, we provide full support for developers with their substrate studies and further set off their career paths. We host Polkadot Hackathons every season to attract top-notch developers to build and innovate for the prosperity of the ecosystem. As a greater China technology resource integrator, OneBlock+ also partners with developers, communities, business elites, and key media who have business insights and experiences in the blockchain industry to provide educational events, such as technical courses, webinars, AMAs, and offline events for the industry. Want to shape the crypto world together? Come and join us today!
