As a start-up, there are several ways to raise capital – venture capital, crowdfunding, funding from business accelerators or incubators, entering competitions, bank or access loans, or looking into government funding. Venture Capital (VC) funds help start-up companies, and small businesses receive financing from accredited investors, including investment banks and other financial institutions.
Investors choose to put their money into a company because after their research and due diligence, they believe that the returns will be worth it in the long run. Oftentimes investors provide guidance or even retain a seat on the board to direct how the start-up is run to ensure that their investment stays on the right track. Generally, venture capitalists are looking for a market gap that will change the playing field and disrupt an industry.
“A VC partnership is a 10- year blind-pool – a long relationship in which investors have limited ability to exit, and no clarity of outcomes.”
– Mahendra Ramsinghani, The Business of Venture Capital
Does any of this sound familiar to you? It should. The traditional financial model runs parallel to the decentralized version of blockchain project investment and participation. These two functions happen in alternate universes and despite VCs typically investing in disruptive tech, the world of VC has remained untouched by technology.
How do the VC and blockchain worlds collide?
At an administrative level, blockchain ensures better processing and security procedures for all the parties involved through smart contracts. Some private investment funds have even used the incentive-based model that blockchain uses to spur data scientists to ensure effective investment analysis.
Mostly, the two worlds collide where blockchain can be used to raise funds for the traditional start-up ventures and vice versa. Traditional venture capitalists can now access cutting edge blockchain projects!
Blockchain offers massive innovation for the VC investment industry in many ways. Both parties have a lot to bring to the table.
VC’s can school Crypto investors on the benefits of more robust investment practices with real due diligence while, as mentioned, giving crypto investors access to projects in sectors outside of the chain.
Blockchain is offering more liquidity for VC’s and makes their investments more inclusive, broadening the pool of investors into the blockchain community. Usually, traditional VC funds are less democratic in nature and open to only a few elites that meet certain criteria of an accredited investor.
“Crypto Capitalism is the new Venture Capitalism.”
– David Sacks, former PayPal COO
Tal Elyashiv, Co-Founder and Managing Partner at SPiCE VC, says that the two disparate worlds working together “allows investors to enjoy the benefits of investing in a VC fund while committing much smaller amounts than required for participating as LPs in a traditional VC fund, allowing for much more participation of investors in the fund.”
It seems that this collaboration and potential future merging can only mean good things. AIKON and Republic are teaming up to ride this wave and enable the growth in both of these industries.
Republic is a fundraising ecosystem that aims to provide start-ups with the tools needed to raise capital from all types of investors, not just accredited investors. Republic’s idea is to democratize the investment landscape and allow anyone to become an angel investor while driving start-up investment as a mainstream investment class.
Republic’s inclusive model means anyone can invest in vetted private start-ups. Both non-accredited (retail) and accredited investors can invest in Republic. Republic’s platform is compliant in the United States, and we can also support international investors.
The ORE ID solution makes the experience of a typical Republic user seamless.
And that is where AIKON comes in to solve fundamental blockchain viability. Republic will be utilizing the AIKON’s ORE ID to create multisig accounts that will be used for secure password recovery and administrative wallet accounts. With ORE ID, the issue of creating a user-friendly way for rapid user adoption for non-technical, mainstream users is a non-issue. Layer 1 blockchain wallets still require a certain level of technical knowledge to operate them, and the majority of users on Republic are retail investors who are not very crypto-savvy.
Republic users, thanks to AIKON, have the ability to login with a blockchain account using their email address, and ORE ID allows Republic users to keep custody of their own assets.
It’s the perfect combination! Republic curates private investment opportunities with high-growth potential across start-ups and has access to high net worth individuals, and AIKON provides a secure login using social accounts. The Integration of AIKON’s ORE ID is opening the possibility of Republic being able to support the blockchain ecosystem more and more by making the user onboarding experience simpler.