Cryptocurrency and Venture Capital: A Systematic Review of Blockchain-Based Funding Mechanisms for Startups

Abstract

This Systematic Literature Review (SLR) analyzes 38 empirical studies published between 2015 and 2025 (sourced from Scopus and Sci-‎ScienceDirect) to map blockchain-based funding mechanisms in the context of venture capital (VC) and entrepreneurial finance. The review ‎addresses four research questions concerning the evolution of these mechanisms, their impact on startup performance, and associated risks ‎and regulatory challenges. The findings establish a robust taxonomy of mechanisms, including Initial Coin Offerings (ICOs), Security Token Offerings (STOs), and Decentralized Autonomous Organizations (DAOs), each presenting unique features and regulatory profiles. ‎Crucially, the review highlights significant gaps in long-term performance data, revealing challenges related to investor protection, fraud risk, ‎and regulatory uncertainty. By integrating Signaling Theory and Governance Theory, the study discusses how tokenomics and team credibility function as signals instead of traditional VC due diligence, presenting a critical comparison between token-based funding and traditional-‎al venture capital financing. This paper offers valuable insights for academics, policymakers, and industry practitioners by providing a com-‎comprehensive map of the field, suggesting avenues for future empirical research, and offering focused policy implications regarding regulation ‎and investor safety in emerging markets‎.