Michael Sitalo, fractional CFO and former Wall Street insider, brings a rare mix of institutional rigor and Web3 experience. From managing €2B traditional finance portfolios to advising crypto startups on runway and fundraising, he’s seen both sides of the financial spectrum. In this interview, Michael breaks down the realities of institutional adoption, the hidden financial pitfalls killing Web3 startups, and why clean numbers — not hype — are the real key to survival in the space.
- Hi, Michael. Tell us about your background.
I’ve been active in the Web3 space since 2017 — both as an early investor and as a builder. Prior to that, I managed traditional finance portfolios, including a €2B mandate for a Swiss fund. I also spent time on Wall Street, which gave me a front-row seat to how institutional capital moves — and how it’s now gradually shifting into the digital asset space.
- Does Wall Street still think crypto is a scam, or are they finally getting it?
They’re definitely getting it. You now see former investment bankers launching their own Web3 ventures, and major asset managers are actively working to bring real-world assets (RWAs) on-chain. The perception has matured significantly.
- We hear a lot about “institutional adoption” — but what does it actually look like on the ground in New York?
The rise of companies like ONDO Finance is a great example. These firms are creating on-chain access to traditional financial instruments — bonds, treasuries, and structured products — in a compliant and scalable way. That’s institutional adoption in action.
- You’ve made the case for Fractional CFOs. What is a Fractional CFO and why do Web3 startups need one?
A fractional CFO brings financial discipline and strategic clarity to early-stage teams. Most founders are visionaries, but they often lack the time or expertise to build a solid financial framework. A seasoned CFO can help them make data-driven decisions, prepare for funding rounds, and navigate runway and burn with confidence.
- You’ve worked with a bunch of founders. What’s the number one financial blind spot you see?
The most common gap is the absence of structured financial planning — no forecasting, no dashboards, and no reliable reporting. Many teams run their business based on instinct, but that doesn’t scale. Without numbers, strategy becomes guesswork.
- Would you say that poor financial understanding is one of the top reasons startups fail — not rug pulls, not market crashes — just basic financial chaos?
Absolutely. Financial mismanagement is a leading cause of startup failure. It’s not always malicious — most of the time, it’s just inexperience. But chaos kills companies, especially when scaling.
- Who actually runs Wall Street — hedge funds, private equity, or asset managers?
It’s a complex ecosystem with overlapping power structures, but ultimately, it’s the investors who hold the cards. Institutions shape the financial landscape based on what capital demands — and everyone else, from asset managers to bankers, builds vehicles around that demand.
- How does Wall Street really make money?
It’s not just about trading. The bulk of revenue comes from fees: underwriting, M&A advisory, capital raises, asset management fees, and structured products. Carry, spreads, and recurring fees often outweigh direct investment returns.
- Why are so many smart people leaving Wall Street for Web3?
Web3 is less saturated and more meritocratic. On Wall Street, you can spend years climbing a rigid ladder. In crypto, if you build something valuable, capital and users follow quickly. The velocity of impact is what attracts top talent.
- What about Trump and his policies — how are the markets reacting
Trump introduced uncertainty with his tariff and fiscal policies. Even U.S. Treasuries lost their AAA rating during his term — a historic downgrade. For institutional allocators, that’s a signal of rising systemic risk. Portfolio strategies have adapted by increasing hedging, diversifying globally, and reassessing sovereign exposure.
- What makes a crypto project investable today?
The same principles apply as in traditional VC: solve a real problem, deliver value, and demonstrate traction. The sector may be novel, but fundamentals still matter.
- Which projects are more likely to get funded — and which ones get ghosted?
Institutional capital flows to quality. Right now, there’s strong appetite for infrastructure, compliance tooling, and RWA platforms. Projects that lack clear value creation or real use cases tend to be passed over quickly.
- How can founders pitch without sounding like a scam or just hype?
By focusing on substance — traction, metrics, and the problem they’re solving. If the business is real, the pitch should reflect that.
- What’s the one thing most founders misunderstand about raising capital?
They often overestimate the importance of big-name funds. A smaller, aligned investor who’s truly engaged can be far more valuable than a large firm with a hundred competing priorities.
- One final takeaway: What’s the most important financial advice you’d give to Web3 founders?
Get your financial infrastructure in place early. Set up proper accounting, build a real model, and review your runway monthly. Strategic clarity begins with clean numbers.
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