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Key Notes
- Maelstrom co-founder criticized large early-stage crypto funds for poor performance and excessive fees.
- Pantera’s Early-Stage Token Fund reportedly resulted in over 40% loss in the past four years.
- Vaidya believes oversized funds lack quality opportunities and diminish investor returns.
Akshat Vaidya, co-founder and managing partner at Maelstrom, the family office of BitMEX founder Arthur Hayes, has taken aim at early-stage crypto funds like Pantera Capital. He accused these funds of becoming “too big” and ultimately failing their investors.
In a recent post on X, Vaidya revealed that his $100,000 investment in the Pantera Early-Stage Token Fund LP from four years ago had declined to just $56,000 due to its high-cost structure.
Crypto VC Funds: How LPs Get Rekt
My $100K, vaporized into $56K within 4 years (3% mgmt + 30% carry) by this Early-Stage Token Fund
During those 4 years, BTC 2x’d and numerous seed deals did 20-75x. Yet this fund charged fees to erase half of LP capital. [Vintage matters, sure,… https://t.co/NgLBhxa9AS pic.twitter.com/2R4KJrJyR8
— Akshat_Maelstrom (@akshat_hk) November 3, 2025
Notably, the fund included a 3% management fee and a 30% performance fee, significantly eating into profits. Vaidya compared its lackluster performance to the broader crypto market, which had seen strong growth over the same period.
For instance, Bitcoin BTC $107 861 24h volatility: 2.3% Market cap: $2.15 T Vol. 24h: $48.44 B more than doubled in value within a taken period, while many early-stage projects achieved returns as high as 20x to 75x.
Maelstrom co-founder argued that funds managing large pools of capital often struggle to find high-quality projects. They end up spreading investments too thinly, diluting potential gains.
According to Vaidya, most early-stage crypto funds have expanded beyond what the current market can sustain, leaving limited partners (LPs) with disappointing results.
He added that investors deserve better opportunities to scale their exposure rather than locking up capital in oversized funds chasing too few winners.
The Growing Debate Over Crypto Fund Efficiency
Vaidya’s comments come amid a larger question of whether early crypto funds, once important in blockchain innovation, have simply outgrown the industry.
Leading firms like Pantera Capital, Andreessen Horowitz’s a16z Crypto, and Paradigm have each raised multi-billion-dollar funds. However, deploying that much capital efficiently in a relatively young market has proven difficult.
This has led to what critics call a “spray and pray” investment model, where funds place small bets on numerous startups rather than pursuing targeted opportunities.
On the other hand, smaller firms are positioning themselves as more disciplined and value-focused. For example, Maelstrom prioritizes cash-flowing, acquisition-ready crypto businesses, offering founders straightforward exits without long token unlock periods.
In October, a Bloomberg report claimed that the company is raising over $250 million for a new private equity fund to acquire mid-sized crypto infrastructure and data firms.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
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