We investigate a new category of venture capitalists (VCs)—crypto-native VCs—essential for financing blockchain ventures. Despite their critical role, they have been largely overlooked in research. Drawing on the VC literature and ecosystem studies, we argue that crypto-native VCs contribute through their architectural knowledge of decentralized ecosystems while also facing challenges to their legitimacy as long-term investors. Analyzing 3,070 funding records of blockchain-based gaming ventures, we uncover an inverted U-shaped relationship between crypto-native VCs and venture success. Moreover, results show that crypto-native VCs with experience depth in blockchain ecosystems may mitigate legitimacy concerns, while those with experience breadth across ecosystems show limited impact. This study extends the VC literature by highlighting the role of crypto-native VCs and advances understanding of the crypto funding phenomenon.
