We at Parksen have been approached by multiple institutional investors. Specialized tech and blockchain funds are interested, but also private investors and even large Venture Capital institutions showed their interest.
As a startup, who launch an ICO to fund our project, we saw an opportunity.
RIVALRY BETWEEN ICO’S AND THE VENTURE CAPITAL MARKET
From the moment ICOs launched, pioneering new crowdfunding opportunities for startups, the clash with traditional routes, such as Venture Capital (VC) groups was inevitable.
From the sideline it’s easy to see the new rivalry.
Startups with ICO’s are determent to reach out to private investors and are not willing to give out large amount of equity to VC’s anymore. Those new startups only want to use the funds they raised during their initial offering.
Venture Capital groups are also signaling that they do not want to invest in startups with an ICO. The successful ICO’s have enough money raised during their ICO, and for an VC it means that there is a smaller amount of leverage for getting a large portion of the equity pie.
Both are legitimate replies to this new world of funding startups, but what if there is another route?
COOPERATION WITH VENTURE CAPITAL
We’ve been approached by institutional investors, and as a startup, who launch its ICO to help fund their rise to the global market, we saw an opportunity.
Attractive ICOs are those that have a working product, a client base, an income and a vision for growth and further development. Every VC and every smart private investor knows this and they will check out the company before they invest in an ICO.
For Parksen, as an established company with a working product and a client base, it was easy to attract private investors as well as getting the attention of institutional investors.
We’ve been in contact with VC groups, who are interested in infrastructure projects, smart cities, digitalization and of course blockchain implementations.
Just recently we secured a matching investment opportunity from one of the biggest investment firms in the Netherlands. A matching opportunity, for those who are not acquainted with the term, is where for every dollar we get from other investors, they will invest the same amount of dollars in our project.
A NEW MODEL FOR INVESTMENTS IN ICOS
A new model for investment by VC groups is on the rise as well. Demanding a share of the allocated token as collateral will form a new equity structure for investors.
Will this new model work? Well, we don’t know yet, but it’s definitely not against the spirit of crowdfunding.
STAMP OF APPROVAL
It’s always a good idea to get institutional investors interested in your project. They can help you with funding, make your project more successful, get you in touch with your client base around the globe, and also make your ICO more attractive for private investors.
When you attract institutional investors who want to invest in your project, it gives a stamp of approval that also shows private investors that your ICO is a good project to invest in.