The founder of a Web3 powerhouse with stakes in a slew of popular blockchain projects explains what's wrong with Jack Dorsey's dismissal of VC money in the space

• Animoca Brands' founder Yat Siu says that Jack Dorsey has the power to help shape Web3.
• But the Twitter founder doubts Web3, saying it's being run by wealthy venture capital firms.

Jack Dorsey — Twitter founder and vocal proponent of virtual currencies — is not sold on Web3.

He's convinced it might "never escape" venture capitalists' incentives and will end up being a "centralized entity with a different label."

"You don't own 'web3.' The VCs and their LPs do," Dorsey now famously tweeted in December.

That's how he ended up in a Twitter tiff with famed investor Marc Andreesen, whose firm, a16z, has become the most involved old guard VC firm to throw money at Web3 endeavors.

But Yat Siu — the founder of power player Animoca Brands, which owns The Sandbox and has invested in over 150 other blockchain startups — says Dorsey should understand how emerging tech works better than most as an entrepreneur with a handful of companies under his belt.

"He has the power to shape it, as opposed to just sitting back and saying there are no other options," Siu told Insider. "That doesn't sound to me like the Jack that I think we thought we knew."

'Are we just going to complain about it?'

Dorsey stood by his December tweet last week and stressed the need for open-source tech within Web3 while speaking to — in a Twitter Spaces session.

"I wanted to make people aware of the fact that you have to know what you're getting into," Dorsey said in a Twitter Spaces chat with Roelof Botha — a partner at Sequoia Capital. He also clarified that his tweet wasn't to discount VC's role in the general startup world.

However, he said, "I think people just have to be aware of what they're building, what they're using, who owns it, who controls it."

Siu isn't sold. With any new society or set of constructs — or in this case a new financial system — he said, "you need investors, you need capital" to make them grow.

He said even established players like a16z won't swoop in and take control of these projects. If anything, VCs are validating their value. It just comes down to the size of the returns that VC firms are after, which Dorsey cautioned ought to be minimal: "You have to invest in the open-source community without having any expectation of return for yourself," Dorsey said this month.

Siu also cautioned that risk capital that companies can get in Web3 has changed. VC money is no longer the only fundraising source for startups like in the Web2 age. Even the way these companies can raise money has become more decentralized, such as through NFT sales.

"I wouldn't say it's like Kickstarter, but it has some similarities," Siu said. "Your customers and the future owners of your assets are the ones that can raise money from the beginning, which is the whole promise of Web3."

And on top of that, the nature of blockchain technology makes it difficult for one entity to control a vast swath of the market, since they need a majority's say, and much of the space is community-focused on individual token holders. Users will theoretically get a say in decisions made within Web3 projects, and will thereby own "shares" of them by buying crypto tokens.

"If someone did sell more than half of their supplies to investors, I agree that would be a problem, but most projects don't do that," Siu said. "And any project that does do that probably isn't really aligned with Web3 anyway or is desperate."

Siu said when Dorsey built Twitter, he built it for what it would be in the future and didn't judge it for what it was at the time, a courtesy Siu said he should give to Web3 ideas.

"Are you playing a part in making that future happen? Or are we just going to complain about it?" Siu said.