BlockChain Capital completes 10 million USD ICO.
A more traditional style Venture Capital fund has been launched by Blockchain Capital and has raised over the 10 million USD maximum in its first day and will invest all of this in anything but traditional ventures.
In what BlockChain Capital itself dubs a world first they have launched the First Digital Liquid Venture Fund which they say “will disrupt the traditional VC market and create the first of its kind “Digital LP” investment vehicle”.
The difference with this fund, and why it can disrupt, is that it will not only invest in companies associated with Blockchain technologies, such as Bitcoin, Ripple and Ethereum but it will issue a liquid tradeable token, representing value in the fund, that can be bought and sold on an exchange. This means that investors can essentially cash in their investment at any time as opposed to waiting many years like in a more established Venture Capital fund.
This Blockchain Capital token will be issued on the Ethereum Blockchain, and joins an increasing number of ICOs using Ethereum’s easy and straightforward deployment of secure tokens on its network
Time will tell
We shall certainly see over time whether this fund is able to return value to its investors but with some big names backing it, and a massive treasure trove to pick the best investments from, it certainly has a great chance of retuning investors multiple times their original investment in 5-10 years.
The fund has essentially underwritten the value of the token at 1USD and thus creating a floor at its original par value. This is achieved trough their intent to buy up any tokens in the event that it falls below this base value.
With the ICO raising finishing so quickly, it would have meant many would-be investors potential missing out on the initial offering. This will create a pent up demand and when the tokens are finally issued on Ethereum and listed for exchange you could see an initial explosion in price built around the hype and opportunity of a more regulated type token, of sorts, amidst a largely speculative and unregulated space.
Honey Pot
Of course now they have created a honey Pot for new and more established Blockchain type companies to request funding from. This makes Blockchain Capital the current ‘Belle of the Bitcoin Ball’ and thus creating an opportunity to pick and choose from the most alluring suitors. This should at least mean the Fund managers being able to decide on more quality investments and not just any old Blockchain company with a great idea. With this space developing so fast, and there starting to be a number of well established players likley looking to expand their offerings, there will certainly be no shortage of suitors.
Open Blockchain not Permissioned database
If they use the mantra that the word ‘Blockchain’ cannot be replaced by the word ‘Database’ when looking at company pitches then it is likely to be a better type business investment. Many new startups and advisors are creating new closed access, permissioned style databases and calling it ‘Blockchain’ or ‘Distributed Ledger Technology’ and are really suggesting nothing better than an open SharePoint. Unless a company is building technology that resembles all of the main characteristics of Bitcoin such as having an open and permission-less innovation & security model then it will inevitably find it hard to differentiate itself. Any Blockchain investment needs to be disruptive and not just offering small efficiency gains here and there.
What next
It will be fascinating to see how the token trades when it is listed on exchanges and how they will restrict Non-Accredited US investors from buying the tokens. I suspect it will be listed only on a limited number of exchanges who conduct thorough KYC before allowing investors to buy. One such exchange could be the fairly new NYCEX, which looks fairly quiet but well designed and part of the Argon Group that helped launch the ICO on Tokenhub .