Its actually a mixture of the two because if we think that regulation will suffocate new startups then we are not concerned with the funds. Regulations is meant to decide the amount of capital startups will be needing before coming to the market and the intervals it will be needed but what we see today is startups coming to the market (a global market for that matter) then raise more than what is needed at the time. Since they don't need everything at a goal, it then means they have to keep the amount in a hardware wallet or convert to fiat. Converting to Fiat will not be possible because of the amount involved and keeping in hardware wallet till when its needed and if price was high when it was gathered, and price low when its needed, it then mean that the fund will not be able to do what its meant for and we thereafter shout scam.

Irrespective of the disadvantage that it might bring, I still feel regulations will do more good than harm for the market and would even ensure that milestones are achieved before coming to the market to raise more funds under another guise.