Interviewee: Jocy, Founder of IOSG

Written by: Joe Zhou, Foresight News

After nine years of investing, we gradually realized one thing: the hardest question to answer is not "what kind of founders can succeed," but rather — assuming the track is correct and the direction is fine, why do some highly qualified founders still not survive in the end?

Half of the answer lies with the founders themselves, and the other half depends on the direction they choose and the timing of their entrance. After experiencing four cycles, certain patterns began to emerge repeatedly — even though each founder's story is different and each market background varies.

However, one conclusion is becoming increasingly clear: successful founders have their own brilliance, while failed founders exhibit remarkably similar traits.

In nine years and over a hundred invested projects, we have seen too many ups and downs of Web3 entrepreneurs. Every failed investment bears a cost in real money — from hundreds of thousands to millions.

In order to prevent the same mistakes from occurring again, I created a "failed founder database." The purpose is simple: to avoid stepping into the same river repeatedly.

The capital market never offers a "do-over" option, but we can choose to turn the pitfalls of others into our own signposts. By laying out these failures, we aim to enhance our own hit rate and hopefully help more entrepreneurs avoid detours.

6 Types of Failed Founder Profiles

I have a habit of conducting separate reviews of every deal with each colleague quarterly; every six months, the whole team aligns deeply; by year-end, I pull out a list detailing all the successful and failed projects we've invested in.

Having just wrapped up the first half of 2026, we took this review opportunity to supplement and summarize a "failed founder profile." With this database, we hope to turn the pitfalls we've experienced into muscle memory to preemptively avoid potentially fatal reefs.

Through repeated validation across four cycles, these failure patterns have gradually crystallized — although each founder's story is different and each market background varies, the underlying logic is astonishingly similar.

Before we delve further, it’s important to clarify: the following patterns fall into two categories. One category pertains to founder traits, involving a person's emotions, resilience, judgment, and self-awareness; the other category pertains to project structure, involving token design, capital strategy, and other structural choices. The former is about people, while the latter concerns matters.

Founder Trait Issues

This category of issues is rooted in the founder's character, mentality, and inner drive. They are unrelated to technology or the track, yet often are the main culprits that lead to project failure.

First Type: Emotionally Unstable

This is the most lethal type. When a project faces an 80% retracement, the community is under concentrated attack, and there has been no progress for three consecutive months, the founder's response almost determines whether the project can survive.

Failed founders fall into emotional turmoil during these times — repeatedly justifying themselves on Twitter, erupting in internal conflicts with co-founders, and clashing with users in community groups. During the same pressures, successful founders have already started breaking down problems and making Plan B in the first week.

You don't even need to wait for the retracement to see this. It can be assessed before investment: during due diligence, politely push back against their core assumptions and observe their reactions. Some founders will engage in serious debate with you, standing firm on what should be maintained and adjusting what needs to be corrected, remaining steady throughout; others immediately become defensive or even retaliatory when respectfully questioned. The issues revealed by the latter arise earlier and are more reliable than how they behave under an 80% retracement.

Second Type: Lack of Hunger / Having an Exit Strategy

This category is often overlooked because it is not "conspicuous."

If a founder has a sufficiently soft safety net behind them — whether it's family wealth, high-paying corporate fallback, or a "it’s okay if it doesn’t work out" mentality — their choices in dark moments will often diverge from the optimal solution. Entrepreneurship is a matter of life and death; without a strong "full commitment," it's difficult to navigate cycles.

We once discussed a project in an internal IC meeting where there was a significant divide in voting. It was a team that both Paradigm and a16z were willing to back, the founder had a particularly good family background, and was simultaneously an LP in several mega funds (top-tier venture capital institutions with over $5 billion), all willing to support. If judged solely on the investor structure, this was one of the most attractive deals we had seen.

However, that day our debate over the project continued until 1 a.m. Ultimately, I cast a veto.

The reason is that I believed what this founder wanted to do was too challenging to human nature. Their idea was to create a crypto bank in the African market, which required building a ground team of hundreds locally. However, the founder grew up in the US and China, and to achieve this, he would really need to move to Africa, live and work there long-term, and be on the ground. He repeatedly emphasized his determination in meetings, claiming he would jump deeply into the African local market.

Yet, it was precisely this kind of team that seemed "perfectly correct" — top-tier institutions backing, a perfect investor structure, and the founder’s determination was unassailable — that led us to hit the pause button. Ultimately, the project did successfully conduct its TGE, but it fell far from their original vision of establishing an "African neobank."

This situation is akin to the "execution machine" concept. A team can score full marks on every quantifiable dimension: institutions, structure, track record, determination, plan. Yet, the most critical aspect of entrepreneurship is often that which cannot be quantified — whether there exists that essential fit between this person and what they intend to pursue. When all boxes are checked, it can often lead people to overlook this fundamental question.

We later reviewed this many times: the problem was never that the founder wasn’t good enough, but rather that they were so good in every respect that we almost forgot to ask that one crucial question — does a person raised in the US and China really want to, can they, and are they willing to invest the next five years of their life in the front lines of Africa?

Third Type: Out-of-Control Ego

This type usually manifests as a "well-polished execution machine" or "professor-type founder."

Let’s first discuss the execution machine. Founders with a particularly refined OKR system, slides that resemble a McKinsey report, and who list "execution capability" as their primary advantage — in our data, this type of person tends to raise a high amount of funding, but has fewer follow-up investors and poorer exit performance. This is because they excel at providing optimal solutions to known problems, but in the Crypto industry, the most common situation is that the foundations change. A fully renovated house can be much flimsier than a bare shell.

However, it's important to add: whether or not an execution machine is problematic depends on the track.

In already validated mainstream directions, distribution, recruitment, and repeated execution are key levers, and polished execution-type founders might be the best choice. The issue arises in emerging, non-consensus directions — there, you need more imaginative individuals who dare to navigate ambiguity. So, this is not a hard-and-fast rule, but rather a judgment of founder-market fit.

Next, let’s discuss professor-type founders. Their technical understanding is typically the deepest in the room and deserving of respect. However, we pay particular attention to two questions: first, do they genuinely understand business and are they willing to make compromises for business execution; second, are they coachable, willing to learn, and willing to change?

When a professor sees themselves as a teacher and VCs as students, projects typically get stuck. Technical depth cannot be equated with product judgment, let alone business execution.

We have also invested in founders with deep technical backgrounds and strong business instincts. The key lies not in their academic credentials but in whether they view technology as a means and the accomplishment of business objectives as a goal, as well as whether they are coachable.

There's also a more subtle layer: fallback options.

People from big companies and academic backgrounds often have good fallback options. Once a project starts to stagnate, they are more likely to revert to the comfort of large enterprises or academia. This doesn't indicate that they are weak founders, but it may imply that they lack that sense of having no alternative and the pressing need to prove themselves. We place more value on a "no retreat after a loss" mentality.

Lastly, there’s a type characterized by path dependence — coming from big firms and directly replicating strategies from previous cycle winners. We refer to this type as "using the previous cycle's methods to address this cycle's challenges." Dai Yusen has recently also mentioned a similar observation: "Defeating ByteDance within the rules set by ByteDance is quite difficult." The same logic applies — winners from the last era are most likely to be defeated by the next era.

Project Structure Issues

This category of issues revolves around how founders understand the underlying architecture of their projects — what exactly is a token, how should capital strategies be designed, and whether they have personally experienced the brutality of cycles.

Fourth Type: Token-First Instead of Product-First

This is unique to Crypto and is the most dangerous type.

It differs from the previous categories — the issue does not stem from the founder's personality, but rather from their structural choices for the project. However, this choice itself will reveal what they consider to be truly core.

A typical manifestation is: keeping revenue and equity within an independent entity, with tokens merely serving as a financing tool, and token holders having no claim to the actual business cash flows.

We believe that whether a token is a financing tool or the core skeleton of the product determines whether this founder can navigate cycles.

The criteria are straightforward: if the token is worthless tomorrow, does the project still hold value? If the answer is no, then the token is everything for them, and the product is merely its packaging.

Fifth Type: Lacking a Day 1 Exit Thesis

This is a principle our team has continuously emphasized — "Exit before Entry."

If a founder cannot clearly articulate how they plan to exit in three years right from Day 1 (via acquisition, token liquidity exit, or IPO of the company itself), then their financing narrative in front of investors will remain distorted.

Rather than saying a founder must figure out their future exit on Day 1, it’s more about understanding the order of capital strategies and milestones: what should this round of financing prove? What data can unlock the next round? What will the return path for future investors look like? Early projects are often emergent, and the eventual exit approach may be mergers, token liquidity, or IPO, which is hard to predict — but it is essential to be clear on "What is this round for, and what supports the next round?"

Failed founders usually say, "We are raising funds for the bigger vision." Successful founders will say, "I am raising this round today to be able to secure the next round in 18 months, and the metrics for the next round are XX."

The Final Dimension

The first five types share a common background — they are all red flags (note: “red flag” in the investment context refers to danger signals or warning signs).

Specifically:

• Red flags from founder traits: emotional instability, lack of hunger/having a fallback, out-of-control ego
• Red flags from project structure: token-first, lacking a clear capital strategy

However, the sixth type is somewhat different. It is not a red flag, but rather a pricing issue.

Sixth Type: Lack of Complete Cycle Experience

Crypto undergoes a full cycle every 3 to 4 years.

If a founder has never personally experienced at least one complete bull and bear market, they will significantly underestimate their vulnerability during their first bear market. This isn't an issue of ability, but rather experience — if you haven't seen it, you won't know what the pressure feels like.

This criterion has now become a hard sizing policy: for early teams without complete cycle experience, the initial investment amount will be capped at $250,000.

The judgment criteria are quite simple: What were you doing in 2018 and 2022?

However, this type differs from the first five.

The first five types are red flags, serving to help us identify "who to avoid." The sixth type, however, is not a red flag; it addresses a different question: "For whom can we invest, and how much?"

Strictly speaking, lacking complete cycle experience does not constitute a veto — it functions more as a pricing factor. Those who have experienced full bull and bear cycles tend to better understand managing volatility, coping with community pressures, and navigating the psychology during downturns; yet exceptional talents who have never experienced cycles do exist.

Therefore, our approach is not to outright reject but to hedge with sizing: for early teams without complete cycle experience, we cap the initial investment amount at $250,000, and wait to see stronger evidence of execution capability before increasing our stake.

Turning Failure Profiles Upside Down Identifies Those We Value

Listing failure profiles is not intended to label individuals but to help us more clearly understand: conversely, what type of person is worth betting on.

First Type: Obsession with Problems.

The best founders aren't merely interested in a problem; they are consumed by it. They understand edge cases, user behaviors, competitor reactions, and second-order consequences. They’re not pitching a product to you; they live within that problem. This is the strongest positive signal in a reference call — you can feel whether a person truly spends 24 hours engaging with what they intend to pursue.

Second Type: Second-time Entrepreneurs with Non-consensus Vision

I place particular importance on second-time entrepreneurs who have experienced failure.

Here, "failure" means setbacks at the project level where they have understood the reasons why, and it differs from the fatal personality flaws described earlier. The two are entirely different.

Failure isn’t necessarily a bad thing; what matters is whether they can comprehend what went wrong after failing.

More importantly, they must have their own non-consensus thesis — not the type of person who simply flows with Twitter trends and second-hand information, but someone who truly thinks independently and dares to make counter-consensus judgments.

Third Type: Strong Communicators with Controlled Ego

Communication skills warrant separate mention as they are crucial. A founder needs to articulate complex ideas clearly — to users, investors, partners, employees, and the community. We've seen too many technically brilliant founders who write beautiful code but cannot communicate their ideas clearly. Ultimately, the project reaches a state where, should the person capable of external communication in the team be absent, the whole project falters.

As for ego, it is subtler than expected.

What we seek is not simply "low ego." The benefit of low ego is being coachable and open to feedback; however, a founder must have the desire to be first, to prove themselves, and to withstand adversity, which requires a bit of ego as fuel. The truly dangerous aspect is an out-of-control ego — rewriting the narrative when performance is poor, consistently placing oneself on the right side, and ignoring contradictory evidence.

Thus, the keyword is not "low ego" but rather "controlled ego": ambitious but not delusional.

Fourth Type: Non-avoidant, Unrestricted, and Resolute

The Crypto industry is exposed to public scrutiny and high pressure for years. Without a foundation of willpower, one cannot withstand cycles and is likely to be crushed along the way. Internally, we have a core framework called "Key Questions": the essence of early investment is not to rigidly adhere to a thesis but to continuously iterate on each key question’s prior and posterior.

In simple terms, this embodies Bayesian thinking — constantly updating one’s judgment and beliefs based on existing information (prior probabilities) and new evidence (newly observed data), rather than clinging to an unchanging conclusion. Strong views are welcome, but don’t let your perspective bind you — when conditions change, judgments must follow.

Fifth Type: Three Hard Metrics for the AI Era: Global Perspective, Agency, and Taste

From its inception, Crypto has been the most globalized tech ecosystem — capital, talent, and community moving in real-time across the globe. In an increasingly fragmented world, founders who are doing global business from day one are inherently rare.

Looking at AI, it can solve problems within the distribution, but only humans can pose original questions outside the distribution. Therefore, we focus on two attributes: Agency (the ability to proactively break through) and Taste (aesthetic judgment). These two attributes are becoming increasingly valuable in the AI era.

Only when a founder’s creativity and imagination have been validated can AI become their amplifier rather than a lifeline.

Three Survival Tips for Entrepreneurs: The Cost of Token Issuance Far Exceeds Expectations, and the Entry Fee is Millions

We have a habit of conducting extremely candid reviews internally, sometimes brutally so. We ask ourselves: why did we make that decision at the time? What was the critical mistake? If we had the chance to do it again, how would we change?

Recently, while conducting post-investment management, we gathered all the founders of invested projects for a meeting and offered three harsh but lifesaving pieces of advice:

First, cash flow is far more important than narrative. Projects that survive this round rely not on TVL or MAU but on real cash flow.

Second, do not issue tokens simply for the sake of issuing them; tokens are actually a heavy liability.

In the previous cycle, many new tokens experienced significant devaluations, with our internal statistics showing a depreciation rate exceeding eighty percent.

Thus, we advise invested projects: if you can avoid issuing, do so; if you can delay issuance, postpone it. Why? Because the hidden costs after token issuance far exceed what most people envision.

We calculated a figure: the hidden costs post-token issuance are significantly greater than what most realize, including market makers, liquidity, compliance, and maintaining relationships with exchanges; within this cycle, this amounts to a liability measured in millions of dollars. If in the past few years you haven't raised funds on this scale, you fundamentally can't afford to issue tokens.

Third, respect liquidity.

Sell in the best times and buy in the worst. The valuation at which a project raises funds today determines what performance must be delivered over the next three years to sustain the next round. If it cannot be sustained, then that money should not be raised. Additionally, during periods of optimal token liquidity, one should decisively sell and buy back when it falls below the issuance price to support their protocol.

Nowadays, many people are turning to AI, and many are fleeing Web3. Founders need encouragement, and practitioners need support — everyone needs to come together as a shining light. Thus, we will continue to output research and insights in this industry, providing the most realistic advice.

How We View Founders: Borrowing Zhang Yiming's Three Frameworks

The above judgment criteria are not arbitrary. We have drawn on many external references, among which I have been deeply influenced by Zhang Yiming.

He has a metaphor I continually remember: empathy is the foundation, logic and tools are the middle layer, and imagination is the sky. Applied to investment:

• Foundation — Empathy: Can you treat people as ends rather than means? Can you get along well with the team, attract top co-founders, and demonstrate genuine leadership? This relates to our discussion of "emotional stability, low neuroticism."
• Middle Layer — Logic and Tools: Can you effectively use tools and engage in structured thinking?
• Sky — Imagination: Can you envision things that "might exist but have not yet appeared"?

Zhang Yiming loves to ask one question during interviews: "What important matters do you hold a different viewpoint on compared to most people?" This question serves to determine whether the person is someone with independent thinking habits, rather than merely a "repeat machine for mainstream media."

Over half of the respondents are unable to answer. We often use this question in our reference calls — if a founder cannot mention three things they see differently from consensus, they likely will not be able to present a non-consensus thesis.

Additionally, Zhang Yiming values two points that we also draw upon: first, a strong sense of curiosity and hunger — a willingness to spend time contemplating "what might exist but does not yet" instead of making marginal improvements in already verified areas. Second, the ability to think in extended chains — to independently work through a problem to its conclusion without external feedback. In the Crypto industry, this means being able to thoroughly think through a thesis without user feedback for 18 months.

In Conclusion

What we have summarized over nine years is not how to find the best founders but how not to overlook them.

But at the end of the day, these methodologies are just tools. We have an ironclad rule internally: even if it’s a founding partner, we cannot let projects pass through lightly.

If it’s questionable whether to invest, then we do not invest.

This may sound very simple, but it is the entirety of our secret to navigating cycles.

The foundations of Crypto are renewed every three years; what enables you to traverse cycles is not one or two godly judgments but rather whether you can repetitively press the "do not invest" button.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。