PANews reported on August 28th that Arthur Cheong, CEO and CIO of DeFiance Capital, recently expressed his dissatisfaction on social media with the way some Web3 startups handled their closures. He stated that many Web3 startups that received investment in 2021 and 2022 closed their businesses without notifying investors, calling this "quiet exit" unacceptable. He believes that even if a company fails, it should at least send an email of apology and thanks to investors.

Cheong cited a post analyzing the problems of the current venture capital model, including a lack of oversight, weak accounting fundamentals at startups, investors having little decision-making power, and a tendency to focus on successful projects while ignoring failures. This model relies on the ethical integrity of founders, but in a bull market with abundant capital, founders may self-enrich themselves through various means, such as paying high salaries and bonuses, using company funds for lavish travel, renting their own offices to the company, or paying for contracts with affiliated companies. The post noted that these practices not only benefit founders but also enhance their resumes, while investors' returns may decline significantly or even turn negative. Cheong agreed, stating that this situation remains unacceptable.