Venture Capital for ICOs/Crypto Startups - Virtual Sand Hill Road

SuperHappyDevHouseSG commented 6 years ago

Coins are disrupting venture capital.

Similar to Initial Public Offerings (IPO), in which shares of a company are sold to the public at a predetermined price and are then allowed to float based on supply and demand, Initial Coin Offerings (ICOs) allow companies to fund the development of their blockchain-leveraged services through the sale of tokens, which essentially guarantee coin holders the right to participate in and benefit from the blockchain.

However, venture capital still has a role to play. At the end of the day, blockchain-enabled startups are still building businesses: they need real use-cases, real customers, and real partnerships to succeed. They should not rely exclusively on the funding they raise from ICOs; indeed, being flush with money without any clear direction or business model is a recipe for disaster, and having reputable, pro-entrepreneur tech investors backing cryptocurrency companies can have an enormous impact.

We're already seeing involvement from traditional VCs investing:

USV backed Filecoin before its ICO;
500 Startups, Siam Commercial Bank, Golden Gate Ventures and other reputable investors backed Omise before they launched OmiseGo (full disclosure: the author of this issue currently works at Golden Gate Ventures)
Pantera Capital invests heavily in bitcoin/cryptocurrencies and affiliated start-ups;
Sequoia Capital, Andreessen Horowitz and USV also backed Polychain Capital, a new hedge fudge investing in bitcoin;
and famed investor Tim Draper backed Bancor.

Claims that ICOs will kill venture capital are premature and overblown. If anything, tech-focused venture capital and blockchain companies can still work together, and I strongly believe many of these companies will be stronger for it.

I propose a VR-version of Sandhill Road. In Silicon Valley, Sand Hill Road is notable for its concentration of venture capital companies; nearly every top Silicon Valley company has been the beneficiary of early funding from firms on Sand Hill Road. These include companies like Andreessen Horowitz, NEA, Menlo Ventures, Redpoint, Shasta ... the list goes on. Some of the world's best companies were borne through the capital from Sand Hill Road.

I would love to see something similar in Decentraland. I want there to be a neighbourhood in Decentraland where some of the most progressive, founder-friendly, beneficial funds can be found, interacted with, and pitched. I want there to be a street where blockchain startups, who are solving real-world problems like banking the unbanked, seamless insurance payments, supply-chain management, content distribution and ownership -- disruptive technologies that will literally reshape the global economy -- can go to literally pitch, demo, and explain their startups to some of the best venture capitalists in the world. I want Decentraland's Sand Hill Road to be referenced as the place where future Googles, Facebooks, Ubers, and Microsofts were found and cultivated.

I propose a block of LAND, 100m by 10m, which will be reserved specifically for venture capital firms that have conveyed a public or even financial interest in blockchain-enabled startups. There should be at least ten funds capable of occupying this space, and the author has the resources/network to at least determine interest, beginning with his own fund.

Edit as of 30th March 2018: For the sake of clarity and governance, as the district initiator, I am formally naming the following three signatories of the multi-sig wallet that will receive and store LAND tokens:

1) Russell Hughes (Rocket.Chat: @rus; Linkedin: https://www.linkedin.com/in/rushughes) 2) Tom Ibold (Rocket.Chat: @forward22; Linkedin: https://www.linkedin.com/in/tomibold) 3) Justin Hall (Rocket.Chat: @justin; Linkedin: https://www.linkedin.com/in/justinhallvc)

In terms of actual function, beyond the obvious building structure (which will be branded according to the owner's exact specifications, of course), there will be a dedicated channel inside the building that will allow participants to either send a message (Status, XChat, or simple email) to the investors directly managing cryptocurrency dealflow, or directly interact and communicate with the investor in real-time if they're available. Because many funds assign their investors to specific verticals or industries, and these investors typically operate pretty robust pipelines of inbound leads, having this structure already fits in nicely with existing VC SOPs. Deal-flow would be self-selecting, since only blockchain-enabled startups would want to pitch via DCL, and it might even be a positive indicator of seriousness. Again, this fits in with existing VC SOPs.

Genuinely think there is going to be a demand for this, and I think there should be more than enough investors willing to stake their claim on DCL!