Is it really possible to raise a venture capital?

[ssteinb86]

Everyone tries to raise money via ICO campaign these days. Putting that aside, has anyone tried to get in touch with venture capitals and how does that actually work? I've came across a bunch of them focused specifically on blockchain projects.

Obviously, they must be out there for a reason but is it really possible to attract their attention assuming you have a decent project? Or maybe, most of them hunt for startups themselves?

Any first-hand info is highly appreciated.

[MVT_Freedom]

I don't know if private pre-sale pools are counted as venture capital. I've seen a influx of pre-sale private pools, and from what I've understood is that the leaders of each pool just look for good opportunities or also listens to the input of the people in the pool. And when it's decided they like the project then they just simply contact the pre-sale project and discuss terms etc.

[Kallisteiros]

Everyone tries to raise money via ICO campaign these days. Putting that aside, has anyone tried to get in touch with venture capitals and how does that actually work? I've came across a bunch of them focused specifically on blockchain projects.

Obviously, they must be out there for a reason but is it really possible to attract their attention assuming you have a decent project? Or maybe, most of them hunt for startups themselves?

Any first-hand info is highly appreciated.

It is, and it has been done (many of them start by raising private capital first), but then many projects go through the ICO phase nevertheless. Some of them don't, like Telegram ICO that got canceled, because they raised enough money from private investors ($1.7b).

[elda34b]

It is possible. ETERBASE is one of the new projects that raised their money via VC. But, they still do an ICO. Around 1 Million EUR has been raised from founder and VCs.

[CryptoSpark]

Most very large ICO's are really private offerings these days which I have mixed views about.

Essentially a public ICO is a traditional ICO open to the public. Some allow anyone to invest while others will require investors to carry out some kind of AML/KYC check, perhaps going as far as the offering providing a full prospectus much like an IPO. The trouble is regulators are really starting to clamp down and no one wants to end up wearing an orange jump suit and so the "better" ICO's as in the largest and most planned out ICO's are increasingly going to private offerings.

These private offerings are typically managed by ICO advisory firms who have a book of investors looking to invest in ICO's. An ICO therefore goes to those private investors who will invest significant sums. This is great for those investors who get a bargain price token and its great for the blockchain business because the tokens are bought by professional investors who have gone through a thorough KYC and AML process. The advice these days is to make your token a utility token but treat it like a security. In other words make is sit as far away from the legal fence as possible but put all the belt and braces in place so that if regulators decide it's a security then you're covered.

Also these private placements now typically want equity as well as tokens which resolves the conflict of interest that comes from businesses with shares raising money for tokens. This is a hot legal topic that's only going to get hotter.

And so yes, it's very possible to raise VC capital. If your team and project is strong then you can raise seed funding and then A round and continue on without ever having to run an ICO and if at some point you do run an ICO then seriously consider running it as a private placement through an ICO advisory firm to cover yourself legally.

My main complaint with this is that it can cause liquidity problems in your market. If you run a major ICO and the token holders are a small number of large investors then how does the market get sufficient liquidity to function? I think the best approach was the Bitcoin approach. Organic growth with no hyped up ICO, invented token ICO price while still building a large and strong economy.

[KingScorpio]

Everyone tries to raise money via ICO campaign these days. Putting that aside, has anyone tried to get in touch with venture capitals and how does that actually work? I've came across a bunch of them focused specifically on blockchain projects.

Obviously, they must be out there for a reason but is it really possible to attract their attention assuming you have a decent project? Or maybe, most of them hunt for startups themselves?

Any first-hand info is highly appreciated.

venture capital sucks, as they lost their mental relation to real world obsticels, they lend the rich and established, its like communism, icos in my oppinion are a better alternative but its not easy to have a clear quality understanding of a project in tenency they investors tend to behave similar like venture capialitsts and support the rich and the established instead of giving chance for new enterprises.

regards

[ssteinb86]

Thanks for sharing, everyone 

Most very large ICO's are really private offerings these days which I have mixed views about.

Very enlightening, appreciate that. Will look more closely into this private offerings matter. Have you actually participated in any of them or you've just studied the case?

[CryptoSpark]

I've worked in a long term project that originally looked at running a public ICO as a source of funding and network capitalisation. We were encouraged by a number of ICO advisory firms to proceed with what promised to be a very large ICO but we decided to work with major legal and accountancy firms to really understand the landscape. What we found was that it's legally a very complex area and to avoid legal issues the only safe route was to run a private ICO which most other serious and professional organisations were already doing. We went quite far along the planning route for this but due to our particular client base we decided in the end to go the more traditional funding route. A private offering for equity plus tokens or more traditional route for equity was cleaner and allows more creativity around getting tokens out into the market rather than sat in the hands of a few investors. I've also worked with a number of other blockchain businesses that have gone through these thought processes and due to different circumstances have ended up with different funding results.

So I've experienced the public ICO space, private ICO offering space and traditional funding space for blockchain businesses and they all have pro's and con's depending on what you're setting out to achieve.

PM me if you have any specific questions.

[sologub]

We worked with many angels who gave money to ICO marketing. These money went not to the project - but to third parties: the media, opinion leaders, traffic purchases

[KingScorpio]

We worked with many angels who gave money to ICO marketing. These money went not to the project - but to third parties: the media, opinion leaders, traffic purchases

after the banking cartels and their manipulated media, people will be ruled by a corrupt system of media, opinion leaders and traffic providers....

[sologub]

Which is why these ico's are half baked.

Baked? What you mean?

after the banking cartels and their manipulated media, people will be ruled by a corrupt system of media, opinion leaders and traffic providers....

Dude. You are paranoid

[spiker777]

You're not going to raise venture capital without a very strong product, at least an MVP, and preferably a demonstrable revenue stream. Also, they won't come to you, you'll have to have a presence at conferences and events. Odds are low, but it can be done. Only the strongest projects are being venture funded in 2018.

[ssteinb86]

Which is why these ico's are half baked.

Baked? What you mean?

I guess, he meant "backed"

[KingScorpio]

Everyone tries to raise money via ICO campaign these days. Putting that aside, has anyone tried to get in touch with venture capitals and how does that actually work? I've came across a bunch of them focused specifically on blockchain projects.

Obviously, they must be out there for a reason but is it really possible to attract their attention assuming you have a decent project? Or maybe, most of them hunt for startups themselves?

Any first-hand info is highly appreciated.

venture capital work for the central bank of a country, they are desperate finding good enterpreneuers that deliver the population which supports the countries central bank and national institutions with economic capacities or at least entertainment.

however to really develop something nowadays, these people have fixed themselves to the established rich mainly lending them or giving them power, i doubt these venture capital and investmentbanking will survive for long.

historiclly ven capital. has been created to empower enterpreneuers in france, to improve economic output and fight economic shortages, which the french nobility caused, with their self centric lifestyle,
banks and property billionaires behave in the same neofeudal way today like the aristocrats in prerevolutionairy europe.

banks need trust, to survive and to work, but without trust they cant work, which is the current situation.

therefore we have this decentralisation cryptomovement.

regards

[utpalk]

You can have private investors and the main important thing is how you deal with the b2b deal. Also, if you want to attract private investors you will need some channel through you can reach out to individuals and share the idea. You will have to be ready with your whitepaper but it should be only shared with the private investors and you will keep on changing ideas :-D

[sologub]

no half-baked, its slang meaning it's just never going to work or was not fully completed.

9 of 13 ICO died after the fee. Could not share money.

[CryptoSpark]

ICO's also create a conflict of interest with equity holders which is a cause of concern with regulators and investors.

An investor invests $10 million to build a dApp, the team builds it and runs an ICO raising $50 million. The tokens end up more valuable than the company shares and the investors often end up with no tokens and little benefit from the ICO. Maybe the company itself folds and the token holders walk away whistling. So investors increasingly like to see tokens linked to equity in some way unless it's a DAO and the tokens are the equity. ICO's don't have to be a bad thing but the ICO industry needs to get some code of ethics because there's just too many scams out there. The company I work at is pushing for just such a thing, a code of ethics to encourage good ICO's that reward all participants fairly which in turn should lead to a stronger ICO market.

[KingScorpio]

ICO's also create a conflict of interest with equity holders which is a cause of concern with regulators and investors.

An investor invests $10 million to build a dApp, the team builds it and runs an ICO raising $50 million. The tokens end up more valuable than the company shares and the investors often end up with no tokens and little benefit from the ICO. Maybe the company itself folds and the token holders walk away whistling. So investors increasingly like to see tokens linked to equity in some way unless it's a DAO and the tokens are the equity. ICO's don't have to be a bad thing but the ICO industry needs to get some code of ethics because there's just too many scams out there. The company I work at is pushing for just such a thing, a code of ethics to encourage good ICO's that reward all participants fairly which in turn should lead to a stronger ICO market.

thats true equity and icos, or cryptos are in a zero sum conflict, to a cosiderable extent,

however its doubtful that a private equity holders can gain property over a token, the token might get a huge image damage through it.

regards

[Sema1984]

It might be very difficult if you don't have any contacts from the fiat. The regulations processes will take a long period of time