Venture capital is becoming one of the important ways for early-stage, small and medium start-ups to obtain funding. Venture capital in the modern sense is often referred to as VC (Venture Capital) for short. It is an investment method that provides financial support to early start-ups and acquires shares in the company. VC is a form of private equity investment (Private Venture Investment).
Generally, compared with other investment methods, venture capital is more flexible as a whole, especially for some companies or industries with greater imagination, faster development pace and simpler shareholder structure.
Historically, the model of venture capital has a long history. For example, as early as 1492, Queen Isabella I of Spain sponsored the Columbus voyage, which was regarded as the earliest venture capital in human history. In the United States in the middle of the 19th century, Investing in the whaling business is regarded as the earliest practice of modern venture capital. However, it was not until the late 1990s, when the Internet entered the embryonic stage, that the venture capital field gradually moved on the right track.
In the mid-1990s, venture capital was a small and relatively new form of investment, with a total of only $7.6 billion in capital deployed (less than 5% of the market size in 2021), and 70% of this segment of VC funds They all appeared in technology or Internet companies, especially after 1995, the Internet became a trend, making the market size of venture capital funds explode year by year.
It is reported that in the five years since 1995, the stock prices of listed technology companies have risen sharply, and the returns of the four largest companies at that time have exceeded 10 times, most of which have coincided with the fundraising of the largest venture capital companies. Appeared, until now hot money has been pouring into the VC field. The technological development and prosperity of the Internet industry cannot be separated from the in-depth promotion of early venture capital in this field.
Blockchain industry, the new wind vane of venture capital
20 years ago, VC drove the high development of the traditional Internet field, and now VC is promoting the further innovation of technology and market in the blockchain field. Compared with the traditional Internet field, the overall imagination space of the encryption industry is larger, the development pace is faster and the profit cycle is shorter . The project allows early investors to obtain a super high return on investment in a short period of time, and the encryption industry is becoming a new vane for various VC investments.
Statistics from 2021 show that cryptocurrencies will attract $30 billion in venture capital in 2021, exceeding the sum of previous years (approximately $8 billion in 2018). Among them, large-scale financing transactions of more than US$1 billion in the cryptocurrency field also set a new record, reaching a total of about US$7.2 billion, four times the previous record in 2018.
Some well-known VC investment cases in the industry last year, such as FTX completed a $1 billion Series B round of financing in July, New York Digital Investment Group (New York Digital Investment Group) raised $1 billion in mid-December, and Dapper Labs from including basketball superstars $350 million raised from investors including Michael Jordan and more.
At present, in addition to some venture capital institutions focusing on the blockchain field such as A16Z, Multicoin, Paradigm, Three Arrows Capital, Social Capital, etc., traditional venture capital institutions represented by Softbank and IDG Capital are also striving to deploy in the encryption field . For example, SoftBank was revealed last year to be in-depth deployment of the encryption industry, investing in a Brazilian cryptocurrency fund company, and IDG Capital tested the waters through venture capital Coinbase, imToken, and Ripple in the early days.
Although many traditional venture capital institutions are waiting to see, and think that it is too speculative, quite a few venture capital institutions are interested in the innovation of industry technology. For example, A16Z co-founder Mark Anderson said that "the purpose of establishing a fund is not just Investing in cryptocurrencies is so simple, but the blockchain technology behind cryptocurrencies is regarded as a revolution in computing models."
With the further rise of Web3 concepts such as NFT, GameFi, and SocialFi, and the further compliance of the encryption industry, such as the listing of Coinbase, investors are further injected with confidence. It is foreseeable that VCs in the existing industry will continue to increase their investment volume. More and more capital industries outside the circle will also continue to pour into it to enjoy the "dividend" of this field as much as possible.
VC field or further turn to Venture DAO?
Although more and more VCs are pouring into Web3, they do not conform to the ideology of Web3 in essence. They are more like representatives of the extension of the traditional Internet world to Web3, following the ideology of the Web2 world. Although they are of vital significance to the development of the industry, they cannot change the above facts.
In addition, the intensification of VC competition has raised valuations on the one hand and overdrawn expectations to a certain extent. At the same time, traditional venture capital companies are responding by seeking differentiation, expanding scale, etc., and carrying out self-innovation. On the other hand, venture capital is no longer the "power" of a few people, and it is no longer exclusive to well-connected venture capitalists. game.
In fact, the encryption industry is constantly subverting the traditional corporate form in the form of DAO. The meaning of DAO is Decentralized Autonomous Organization, which is a word with a strong encryption color. It usually means blockchain organization governance, and it is a new type of production relationship organization parallel to existing economic organizations such as corporate systems.
Its characteristic is that working in DAO has no boss or leader, and participants work in a self-driven manner based on software and code governance.
This distributed collaboration system has a high overall fault tolerance rate and high collaboration efficiency. Usually, it can be opened to any autonomous community user, and the overall benefits are shared by community members, and any resolutions in the community will also be decided by community members referendum ( Governance pass), and there is no one-hammer theory.
At present, a considerable part of the blockchain ecology is governed and driven by the similarity of DAO, such as the Ethereum network and the Bitcoin network. Of course, DAO is also constantly subverting traditional things, such as ConstitutionDAO trying to auction a copy of the US Constitution, OpenDAO "seizing power" Opensea through DAO, and AssangeDAO working to restore Assange's freedom, etc.
And encrypted VC may also be becoming a field that is being subverted by DAO. At present, the industry refers to VC driven by DAO as Venture DAO. Its characteristic is that every member of DAO can act as a main investor and make investment suggestions to DAO. Investment decisions are also based on DAO voting results, not through investment committees.
Members of a DAO may have the right to "exit" or terminate participation in the DAO at any point in time, depending on the specific DAO smart contract. Traditional venture capital requires investors to stay in the fund for a period of time, and it's generally not geared toward smaller investors.
Venture DAO is not a new concept. As early as 2016, the DAO organization The DAO on Ethereum can be regarded as the earliest form of Venture DAO. After 2018, MetaCartel, LAO, Flamingo DAO, Stacker Ventures, Angel DAO, Honey DAO, Komorebi Collective, and the recently popular Tiger DAO VC have emerged one after another.
Venture DAO is supposed to be decentralized and highly open, but existing DAO projects of this type have more or less problems. For example, MetaCartel Ventures is not open to new members, and members of Flamingo DAO must be legally regulated by the United States. Qualified investors, and new members of LAO must contribute at least 310 ETH to obtain 1% of LAO member units, which means that a considerable number of users cannot participate.
Honey DAO and Komorebi Collective are relatively lacking in decentralization. Although the overall threshold of Stacker Ventures is low, there are still some deficiencies in function. Tiger DAO VC was launched by Tiger DAO and Tiger capital this year. The current form of its products is more in line with the concept of Venture DAO and has more functions.
This is also one of the reasons why it has attracted much attention since it was launched. On Tiger DAO VC, we may be able to further perceive the future development trend and direction of Venture DAO. Let us explore it together.
The new paradigm of Venture DAO built by Tiger DAO VC
⦁ Seek Tiger, the mother ecology of Tiger DAO VC
Seek Tiger is the mother ecology that Tiger DAO VC relies on. It is a GameFi chain game aggregation platform based on the concept of Web 3.0. It focuses on NFT+DAO+GameFi, and is committed to providing game developers with complete blockchain solutions. .
Seek Tiger itself is a resource-based ecosystem. In addition to providing GameFi developers with API, site technology and wallet support, it also helps more game development studios to release games on the platform, and also provides liquidity tools such as IGO and DeFi , game display and download portal, game guild, community and other one-stop solutions, and is autonomous by DAO.
At present, the ecology mainly includes two platforms, chain game aggregation platform and NFT trading platform, two organizations TIGER Capital and SeekTiger DAO, and four major matrices including capital matrix, guild matrix, NFT matrix and game matrix.
Tiger DAO VC is a Venture DAO platform within the Seek Tiger ecosystem, jointly launched by Tiger DAO and Tiger capital. Tiger DAO VC itself has a resource base, and it is also one of the major innovations in the Seek Tiger ecosystem.
⦁ Tiger DAO VC functions and mechanisms
Although Seek Tiger is a blockchain game aggregation ecosystem, Tiger DAO VC focuses on a wider scope, and it is more focused on discovering high-quality blockchain projects. The Tiger DAO VC investment fund mainly uses the ecological token STI for investment settlement. In addition to financial support, it will also provide Tiger DAO super post-investment support plans, including strategic consulting, resource cooperation, market growth, capital relations, etc., for More blockchain projects provide panoramic support.
pitching
Traditional VCs usually choose projects to invest in through self-discovery in the market. The sources of projects are relatively limited and the investment mechanism is single.
Tiger DAO VC itself is a project display platform, allowing blockchain entrepreneurs to show their entrepreneurial projects to all users on the platform with zero threshold, and vote to decide whether to invest in them. Tiger DAO members will also have The right to give priority to recommendation, so that the project has more opportunities to display.
The Seek Tiger community has a considerable traffic base, and the selected projects in the Tiger DAO VC will show their projects in more detail here, so as to get early support from more DAO members and other users. And all users can review certain problems and risks existing in the project, and some risk review suggestions after verification will be displayed to users to remind them to make decisions carefully, and will also conduct due diligence on the project.
Use the different professional fields of DAO members to conduct product and technical due diligence on the projects they are planning to invest in. For example, DAO members who are software engineers may make technical contributions. DAO members with graphic design skills can create artwork and materials, which provide more professional and independent advice for investment decisions.
DAO members are the community
hit
At the fundraising stage of the project, 10,000 DAO members of Tiger DAO VC participated in the project review and voting, and if the voting rate exceeded 60%, they passed the project screening and reached a strategic investment cooperation; at the same time, a special investment fund was launched for the project, and DAO members voluntarily Invest in STI to participate in the investment, the platform will automatically lock the contract, and will unlock the corresponding tokens in batches according to the project release mechanism to further increase the cost of the project team.
If there are some extreme situations in the later period when the overall performance of the project generation is not good, the DAO members participating in the investment can apply for redemption of the remaining investment principal on the platform, and the platform will also suspend the distribution of the remaining investment funds to the project party to avoid damage to the rights and interests of community users. damage. Tiger DAO VC's membership, investment decisions and assets are managed by its DAO members.
This is in stark contrast to traditional venture capital funds. In traditional venture capital funds, investment decisions and company internal management are all participated by company partners, and there is no relevant circuit breaker mechanism. Investment problems usually need to be borne by VCs themselves. loss.
In terms of funds, the funds of Tiger DAO VC usually come from DAO community users. The overall flow of funds is relatively large, and the investment funds are sufficient, which can screen investment to support more high-quality projects. Traditional VCs only rely on free LP funds to raise funds , investment funds are limited, and investment areas are narrow.
after vote
Tiger DAO VC can also give multi-faceted support to the project after the investment. Tiger VC comes with high-quality traffic, provides strategic development suggestions for project parties, and helps connect ecological resources, promote FA capital relations, community market growth, brand influence, and currency listing cooperation, etc.
In addition to the financial support provided by the platform itself, Tiger DAO VC will also provide access to capital from the same industry, help projects obtain capital support through multiple channels, and provide projects with brand endorsements that can be recognized by the market.
In addition, Tiger DAO VC can also provide functional support for projects such as NFT transactions, IDO, platform hot project rankings, AMA, and LP liquidity mining. Based on the support of 10,000 DAO members, Tiger DAO VC will continue to create ecological value for the project in terms of market growth.
Traditional VC is usually a one-time investment and its own ecological resources are limited. Subsequent support for projects is relatively small, and many services are paid for. The services that Tiger DAO VC can provide are difficult for traditional VCs and existing Venture DAOs to provide.
Tiger DAO VC is a Web3 VC with a higher degree of autonomy and more complete functions in the Venture DAO track. It can not only make up for the various shortcomings of the current traditional VC, but also fully fill in some blank areas of the Venture DAO track. , and further protect the rights and interests of all investors while bringing them early market investment opportunities.
Tiger DAO VC is expected to gradually reach strategic investment partnerships with more outstanding projects, empower each other, promote the healthy development of the industry ecology, and further promote the Venture DAO track to establish a template and lead the trend.
The threshold for becoming a community member of Tiger DAO VC, DAO Medal
At present, many Venture DAO projects have set high thresholds for users. In addition to specific KYC, they may also require certain capital thresholds, such as LAO and Flamingo DAO. The DAO community that enters Tiger DAO VC only needs to obtain the DAO medal to enjoy the platform's proposals, voting, governance, pledge, dividends and other functions or rights.
Seek Tiger currently sells NFT digital tiger blind boxes. Users will get an "NFT digital tiger" of different scarcity after purchasing and opening the blind box (a total of 1 million). Users can redeem DAO honor medals through NFT digital tigers according to the rules. When there are 3 or more types of non-N digital tigers, they can participate in the synthesis of DAO digital medals, and the digital tigers will be destroyed after synthesis.
According to the rarity, the DAO Medal of Honor is currently divided into three types, namely "SN", "VB" and "CZ" three tiger head styles, and the rights and interests obtained by holding different DAO Medals are different.
Every time the user opens the blind box, he needs to consume 10 STI tokens, and the STI tokens will be destroyed after opening the blind box, which means that the synthesis of DAO medals will consume a large amount of STI tokens, only when the blind box is fully sold After that, 10 million pieces will be destroyed. According to the official plan, after the blind box is sold out, the breeding of digital tigers will be further started, and the consumption scene of STI will be further created.
In addition to the above-mentioned consumption scenarios, as well as many scenarios such as IDO and in-game shopping, STI will also be the main fundraising asset in Tiger DAO VC, which means that whenever a high-quality project in the ecosystem successfully raises funds, a large amount of STI will be locked , greatly reducing the circulation of STI, and is expected to form a strong rigid demand.
It is reported that STI will open IDO at 8:00 p.m. on March 21, and open secondary market transactions after IDO, so you can stay tuned.