Press Release

How Blockchain Can Help Improve Venture Capital Investing?

Even with recent reports suggesting that about 75% of all venture-backed businesses fail in making profits, venture capitalists are still quite picky while choosing a business to invest in.

This mainly has to do with the goals that venture capital investors have when picking a business for investment. VC firms usually invest millions of dollars in businesses with very-low to no liquidity in a hope that the long-term profit will at least be 5x or 10x the investment.

Most businesses either fail in meeting the expectations of such investors or are completely inaccessible due to fierce competition.

Introducing the blockchain technology can help make VC investments more accessible for most businesses and in this article, we will be taking a look into how the blockchain technology can help in improving the functioning of venture capital investment firms.

Analyze Business Potential Easily

As blockchain has the capability to store and maintain current as well as historical data from all aspects of a business, investment firms can easily analyze the potential of the business ensuring higher and long-term investments.

Moreover, instead of pooling in a large sum of money into a business, the availability of business data will make it easier for investors to scale the investment as the business progresses.

Transparency in Business Functions

Blockchain will help in building a transparent environment where business owners and investors can participate in the working and also efficiently view all the transactions and other data related to the functioning of the business.

Moreover, as the data stored in the blockchain can easily be verified, investing firms can also implement automated milestone-based funding mechanisms where additional funds are released to the business automatically if certain milestone set by the investors is reached.

Better Liquidity Options

Liquidity is one of the main concerns for VC investment firms while picking a business to invest in. Most of the startup and small-scale industries have very-low to no liquidity options as their shares doesn’t worth much.

By making use of blockchain-backed platforms, investment firms can buy ICO tokens from within the platform and then make investments using these tokens.

Tokenization of investments generates better liquidity options, especially for startups and other businesses with little share value thus offering better security to the investors.

One prime example of such platforms is URIS, which is run by a non-profit organization formed by entrepreneurs and venture capitalists. The URIS platform makes it easier for investors to find profitable businesses and startups and easily invest in them using the URIS ICO tokens. The URIS ICO tokens also makes it easier for investors to diversify their investments and gain maximum liquidity for it as well.

Overcome Geo-Political Barriers

Many countries have several regulations regarding venture capital investments which highly restricts venture capital investment firms from investing in startups overseas. Even though VC firms in developed countries are very much interested in making business investments in emerging countries, they are restricted by these regulations.

As blockchain-backed investments are accessible from anywhere in the world, it will be much more comfortable for VC firms to find and approve funding for businesses with huge potential located anywhere in the world.

Final Words

The way VC funds work have remained pretty much unchanged for several decades now.

However, as blockchain-backed platforms bridge the gap between investors and business owners, we will surely see many more businesses securing VC funds than ever before.

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