Venture capital investment in startups seeks to reinvent the world by developing breakthrough technology, and generating billions of dollars in the process. Yet, the process for raising venture capital itself has been relatively stagnant. This is set to change with the introduction of Blockchain technology to the process.
Using Blockchain will provide the VC sector with a much more liquid fund by issuing digital security tokens that can be traded in major cryptocurrencies exchanges. This process also offers the investor benefits stemming from a more robust investment process with greater diligence, as well as the ability to diversify outside of the cryptocurrencies world into other emerging tech sectors, including Artificial Intelligence (AI), Augmented Reality and Virtual Reality (AR/VR), the Internet of Things (IoT), cyber security, and many more.
As a venture capital firm, Crowdnext uses Blockchain technology to raise funds to fill the gap in the current tech market industry that exists where many companies find themselves to be too large for seed or angel investors, but not quite ready to pursue a series A funding round or an ICO.
By focusing on startups in this gap, it is much easier to identify the ones that are most likely to reach a successful A Round or ICO within 12-18 months. When these companies are funded at that moment, they become secure in knowing they will be able to reach the next financing event and the investment has the opportunity to increase its valuation 4-7x in a relatively short time – much shorter than with a traditional VC investment.
This principle will transform the industry while also making VC funds much more inclusive (within a regulatory framework), which will attract billions of additional investment dollars to VC.