How does VC change for crypto VCs?

Does getting early liquidity change the model? How?

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Right. Which means that a crypto VC can afford to invest in smaller outcomes that occur faster I think,.

Significantly. It makes the status quo (10 yr hold) less attractive.

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Taking more risk in VC = betting on either more or less upside companies, so in theory a crypto VC can afford to invest in smaller outcomes.

Absolutely it does. Time to liquidity and public market access means you can likely take on more risk, imo. On most stages of investment up till Series B/C.

Different on many levels
Early liquidity 
  - Investments can eventually fail, but still return multiples in IRR 
  - Fund lifecycle can be 2-3 years
Different LPA structure, can you:
  - invest in liquid tokens?
  - Put called $$ in ETH / BTC? 
Risk management
  - DAOs, voting, staking, compliance, insurance etc etc

Early liquidity and high public market valuation (high revenue to FDV multiples) lead to higher private market valuation in no other world a pre product company can raise so much capital