Blockchain technology was created by an unknown but, not unsung, hero by the name of Satoshi Nakamoto. For this individual, this technology was a means with which he/she hoped the world change. There was a hope that the world would operate and break away from the clichés of the old world fintech and commerce.
So, finally after almost a decade since its launch, the massively amazing Bitcoin boomed. Bang at the tail end of 2017 Bitcoin rose and rose in value. For a few hours, 1 Bitcoin was valued at $19,783.06 You read those numbers right!
Within a matter of days, a decade long wait was validated and Bitcoin, cryptocurrencies and Blockchain technology finally got it’s 15 minutes of fame. Only, these 15 minutes have turned in to a tsunami as companies and multiple sectors have eagerly jumped on to the bandwagon of decentralization. For this they relied heavily on ICOs. Initial Coin Offerings, are a means of modus operandi with which companies give the early bird investors ownership in a set amount tokens before launching them to the public.
Unfortunately, as many investors were in the rush to reap in rewards and make profits and ride the wave of the Bitcoin Boom, they failed to check the validation of the Blockchain on which the company was to be based. They didn’t research the team behind the organization and what was involved in their white paper. This resulted in up to 70% crashing of the bogus companies who had claimed of running successful ICOs. This crash has also resulted in distrust in the future investor of all things crypto. With this blog, we hope to focus on how traditional means aren’t always obsolete and the new age Blockchain technology has much to gain from Venture Capitals.
What are Venture Capitals?
When a new company is launched, it is commonly known as a startup. The company owners usually have a set amount of assets that they use to help the company grow. Now, with more and more startups being launched, it has become apparently clear that not everyone has got their financials sorted. For them, venture capitals are a blessing from heavens above.
But, what exactly is a venture capital? New emerging companies would invest a substantial fund in order to increase their popularity in the masses. Then, as more and more investors showed interest in the company and its future growth, they buy shares of the company and in turn become financial partners in the business.
This clean-cut solution has helped many startups reach amazing heights. They are legitimized protocols that are in place so that none of the parties involved are swindled. Though it needs to be kept in mind that the risk factor that is involved in such ventures are not covered under any policies.
One would wonder, how can this remotely link to Blockchain industry? The answer is simply that VC (Venture capitals) are more trustworthy than ICOs. Seeing that Blockchain technology is still at its infancy, it such financial aids and protocols shall definitely help deserving startups reach their potential.
What Are The Steps Involved?
In order to gain venture capitals, a startup needs to undergo the following steps.
- Presenting a Business plan: This helps the startup bring the investor up to date on their plan of action.
- Evaluation via Auditing: An internal Auditor thoroughly goes through the entire business plan. This helps them ensure that there are no loopholes involved that can result in a loss. Also, the auditor undertakes a background check on the startups employees and their education. This ascertains the credibility of the startup company.
- Deal Negotiation: Under this process, a deal needs to be negotiated in order for all the parties involved to be satisfied with their share. Additionally, this particular step makes a proper breakdown of the entire investment structure to avoid confusions in the future.
- Post Investment Activity: Not to be dismissed lightly, this step is very crucial for a long successful business relationship. It helps all the parties to increase communication with each other.
- Exit Plan: An exit plan helps as many a times after taking all the factors in mind, calamity strikes, and the business fails. No matter the reason why, an exit plan in place beforehand always helps in the long run.
Which Are The Best VC Firms?
Barry Silbert founded this website as he believed that the Bitcoin and Blockchain technology has the power to change the social and global economic scenario. This belief was passed on to the team who passionately works hard to develop a better financial system. They do this by leveraging their networks and access to capital.
Digital currency group are strategic investors that invest in and supports digital currency and Blockchain ecosystem by providing other companies using this tech with capital, connection and knowledge that will help them grow.
This website was founded in 2013 with the sole mission of providing financial aid to entrepreneurs in creating top-notch companies, projects, and firms. All of this with the help of Blockchain technology. Their vision is that Blockchain technology has the power to break down old and traditional businesses and create a new market and business models. If you are one of the people who wants to use Blockchain technology to push the world into a positive direction, then this company has the potential to connect you with investors and entrepreneurs who will give you ample of resources to do so. It is one of the oldest and active venture capital firms that has financed 72 companies in the Blockchain sectors.
A few months back a private equity and venture capital firm Union Square Ventures (USV) decided to invest in blockchain technology. USV backs trusted brands who want to use Blockchain technology as a means to change the world or build successful businesses by providing them with capital, networks, protocols and platforms. Guess, in Satoshi they trust!
There you have it folks! Venture capitals are the way to go to create a definitive startup in the Blockchain sector. We hope this blog has helped you understand the significance of Venture capitals in this new age decentralized world.