How ICO Will Change Traditional VC: a New York Venture Fund Unveils its First Market Report
Starta Ventures is pleased to announce the release of its first market report - Hybrid Capital: The Future of Venture in the ICO Era. The report lays out months of research and experience into easily digestible chapters, a must-read for a modern day venture investor and a comprehensive and practical resource for understanding current ICO and VC trends, their collision, collaboration and direction.
When Starta Accelerator took the bold step of hosting its own ICO in July of 2017, it was the first accelerator to “tokenize” part of its portfolio and raise funds through a crypto token sale. After four of its portfolio companies learned from the experience and launched their own ICOs — raising over $22 million — Starta’s founders, Alexey Girin and Katya Dorozhkina, realized that they were standing on the cutting edge of a trend which looked like it would radically reshape venture capital altogether.
As seen in the publication:
“2017 has been an exciting and interesting year for everyone in venture capital and the crypto-community. As blockchain unfolded from a narrow niche to global adoption, and volumes of Initial Coin Offerings shook up traditional venture funding, it became obvious that this technology has the potential to disrupt traditional venture capital. And this process has already started.”
“Various projects of angel and seed stage have found an alternative to the classic funding model and raised more than $3 billion through ICO. This number is comparable to the volumes of traditional venture funding during the same period.”
While ICOs had previously been limited to blockchain infrastructure, tech founders completely unrelated to the community were seeking out ICOs as a method to avoid traditional VC models which cost them valuable equity. They were also bringing in anyone with a pulse to invest — something which eventually caught the ire of the SEC and other global regulatory bodies.
This was simply the beginning of a movement which was only in its nascent stages. ICO funding was having something of a “Wild West” moment, with one week having a thousand more currencies than the last and governments scrambling to regulate.
All that led to a lot of confusion and oversaturation of the market. Startup companies found it harder and harder to raise funds through the ICO model, and it looks like for a lot of them it has already become too expensive and difficult an option. With the number of new offers growing exponentially every day, inexperienced investors are now seeking direction among third parties and trusted advisors, increasingly shifting such a seemingly online matter as ICO into the offline world.
What would be the role of venture funds in this new era? Starta believes a merging and significant restructuring of the whole system will follow.
Learn all about it in Hybrid Capital: The Future of Venture in the ICO Era, available for purchase for $9.95 at Amazon.
Or request a complimentary copy at StartaVentures.com
