“In this post, we are going to explore the paradigm shift of investing in the context of decentralized applications. First, we will briefly explain the history of venture funding and how it evolved in the last few decades. Second, we will discuss the current situation around crowdsales and ICOs. Finally, we will glimpse into the future and look at what’s coming.”
- It’s fitting that crypto dominates on our one year anniversary as it was one of the core topics that made me realise VC was approaching a crucial period in its history and was about to possibly be tipped on its head for the first time. Just a few issues into Series F’s life, Stefano Bernardi published The first real revolution in venture capital: crypto tokens
and I realised just how real this threat to traditional VC was. After inviting Stefano to speak on the topic at my event
, and then watching him produce his own (amazing) Sunday newsletter
, it feels like we have come full circle on the first anniversary of Series F that he assisted with the above post.
- And what this post is, is an excellent and comprehensive look at how VC has been and will be disrupted by decentralised methods of fundraising. Although there isn’t anything “new” in this post, it is one of the best posts I’ve read on the future of VC during my one year of curating this newsletter therefore I had to highlight it, even if it is not the type of article I can provide additional insight to.
- I will leave you with one observation though. Back when Stefano published that post, it really appeared that ICOs were about to disrupt VC immediately and violently. This didn’t happen though (not yet at least). In fact, I’m of the opinion that not only did traditional VC manage to fend off this threat, VC actually disrupted ICOs. Due to traditional VC wanting a piece of the action, they simply moved to being the dominant actors at the pre-sale, before the ICO, meaning not only were they still able to participate they could in fact gain significant leverage.
- The post argues that this could be about to change though: “Too much private capital can definitely harm network growth. We believe becoming a private investor in a great decentralised project early on is going to become more and more difficult”. For now though, I’m still willing to bet against that, money talks everywhere, even if your world is decentralised.