It might seem at first glance that there is no place for venture capital in the world of cryptocurrency. After all, many people associate crypto with Bitcoin, which really doesn’t have a company behind it in which to invest. The value of the coins simply comes from the forces of supply and demand. Many people don’t see any kind of intrinsic value in the world of cryptocurrency, hence leaving nothing for those involved with venture capital to sink their teeth into in any way. Yet cryptocurrency goes far beyond Bitcoin, into the realms of coins whose purpose is to fund initiatives involved in all walks of life. Many initial coin offerings come from groups that are essentially start-ups, and their big ideas might indeed deserve the attention of the kind of seed funding for which venture capital was invented.
This doesn’t mean that venture capitalists should go around throwing money at every new coin offering that comes down the pike. The same kind of due diligence should be done to any new offering as it would be for a new company seeking early-stage funding. In much the same way, you should be doing due diligence as an investor for any potential coin purchases, which is why a trading robot like Bitcoin Loophole can be such an integral tool. The venture capital world may soon be intersecting with the realm of cryptocurrency. Here’s what it all means.
1. The Pitch
If venture capital fully integrates with crypto, those who are making coin offerings have to work on their salesmanship pronto. It’s one thing to throw a white paper and get the attention of some retail investors for a coin. It’s quite another to bring a venture capital group into the fold. That will require the kind of song and dance that startup managers have been doing for a long time. And that’s a capitulation that crypto entrepreneurs must be prepared to make to draw in this potentially big money.
2. The Applications
What venture capitalists will be looking for are the kind of organizations that have ideas and intentions that go beyond making investors rich. That is certainly a good thing if they can pull it off, but venture capital managers know how to see through empty pitches. What they’ll be looking for are blockchain applications that solve some sort of endemic societal problem or fill a neglected niche. The coins that fund those initiatives will have sustainable value over time.
3. The Long Game
One thing that will immediately follow the incursion of venture capital on the crypto world is that crypto should seem like more of a sure thing for other investors who may have been skeptical. After all, venture capital is now an in and out operation. The investors involved generally will commit their money for years, making for a long-term influx of funds for the coins in question.
Venture capital’s big money may soon be flowing into crypto very soon. What happens next is what all investors in the coins want to know.