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Why are top crypto founders backing the new $35 million 5c(c) Capital prediction market fund?
Created at: 24 March, 2026 06:56 AM
Top crypto founders and venture capitalists are backing the new $35 million 5c(c) Capital fund to build essential infrastructure for the rapidly expanding prediction market sector. Rather than funding competing exchanges, industry rivals and major investors are uniting to target "second-order" startups focused on liquidity, data, and compliance. They view the surrounding ecosystem as a critical bottleneck that must be solved to support the massive valuations of underlying platforms.
Fund Overview and Market Context
The fund is led by two early Kalshi employees, Adhi Rajaprabhakaran and Noah Zingler-Sternig, who have managed to secure backing from fierce industry competitors.
| Metric / Detail | Information | Source |
|---|---|---|
| Fund Size | $35 million | [Source: |
| Target Investments | ~20 early-stage startups over 2 years | [Source: |
| Key Backers | Tarek Mansour (Kalshi), Shayne Coplan (Polymarket), Marc Andreessen, Kyle Samani, Micky Malka | [Source: |
| Kalshi Valuation | $22 billion (reported) | [Source: |
| Polymarket Valuation | ~$20 billion (targeted) | [Source: |
Building Critical Market Infrastructure
As prediction markets scale from niche crypto use cases to mainstream financial sectors, they require a robust ecosystem beyond the trading platforms themselves. Investors recognize that specialized support systems are currently lacking. Kyle Samani of Multicoin Capital noted that he backed the fund because "the next few years are critical to build out infra[structure] around prediction markets" [Source: 2026 03 23 Kalshi].
Targeting "Second-Order" Effects
Rather than launching new exchanges to compete with Kalshi or Polymarket, 5c(c) Capital plans to invest in the "second-, third-, and fourth-order effects" of the prediction market boom [Source: Markets 2026 03 23]. Over the next two years, the fund aims to back roughly 20 early-stage startups focusing on market makers, liquidity provision, data tools, prediction market indices, and compliance systems [Source:
En Square Post 304689469166513].
Capitalizing on Generational Growth
The founders' pitch document describes the prediction market space as a "generational investment opportunity" [Source: 2026 03 23 Kalshi]. This thesis is supported by the soaring valuations of the primary platforms, with Kalshi reportedly raising funds at a $22 billion valuation [Source:
Business Kalshi Secures 22] and Polymarket eyeing a $20 billion valuation [Source:
En Square Post 303823667475745]. Backers view 5c(c) Capital as a diversified way to capture value from this broader sector growth.
A Focus on Regulated Innovation
Despite the massive growth, the prediction market sector faces intense regulatory scrutiny, including state-level pushback and proposed federal bans on certain contracts [Source: 2026 03 23 Kalshi]. 5c(c) Capital is leaning into this regulatory reality. The fund is named after Section 5c(c) of the Commodity Exchange Act—the clause granting the CFTC oversight of event contracts—reflecting the founders' conviction that "durable innovation happens when new ideas meet disciplined regulation" [Source:
www.5cc.capital].
Conclusion
Top crypto founders are backing 5c(c) Capital because it offers a targeted vehicle to build the critical, compliant infrastructure necessary to sustain the multi-billion-dollar prediction market boom. What remains open is how effectively these early-stage infrastructure startups will navigate the ongoing federal and state-level regulatory pushback against the broader betting sector.