Crypto Startups Turbocharge Valuations as Investment Picks Up

Crypto startups are putting valuations in the fast lane with an aggressive form of fundraising that reflects the digital-asset industry’s recovery as well as a desire among venture funds to put money to work.

This approach involves an open-ended, rolling fundraise that keeps the cash coming in and quickly lifts valuations, a contrast to the traditional venture-capital model of discrete rounds spaced over a number of years. An open-ended funding round rewards earlier investors as they benefit from a rapid uplift in a startup’s value, courtesy of commitments from later backers.

“When a deal is very oversubscribed, it’s becoming ...