How NFTs Are Going To Change The VC Game

NFTs will open up Venture Capital investment for everyday investors and also create liquidity for them.





NFTs and cryptos are on a rollercoaster from last year!


NFTs were hyped like crazy and changed everything.


I was part of the hype as well.


I think I invested in 12 NFTs most of which are now worth nothing!


Now that things are cooled off, we can have a better look at what just happened and how the future of venture capital will change.


I am assuming you know what NFT is.


NFTs are essentially proof of ownership.


You can own anything in the real world and then have an NFT to represent you as the owner that is on the chain.


This means that no one can forge this.


Everyone knows you are the owner.


And you can earn loyalty from reselling your NFTs.


How this can change venture capital?


Venture Capital is a pool of money that investors invest and the general partner decides what startups to invest in.


After a period of 5 to 10 years, the general partner will sell all the assets and then distribute the profit based on a certain contract between investors.


Everyone is happy.


The cons of investing in venture capital are:


- You need to be an accredited investor

- You need to lock in money for a long period of time and it is not a liquid investment


Now we are getting to the fun part.


DAOs can replace venture capital.


DAO (Decentralized Autonomous Organization) is a coin-based entity that acts exactly as per the venture capital structure.


This means investors invest in a pool of money within the DAO.


Instead of having a fund manager, smart contract and manage the pool of investors.


A smart contract is a piece of code that can make decisions based on specific rules on how to deploy the capital etc.


In essence, DAO is a new and modern form of compliance and governance structure.


This gives investors two benefits:


- Everyday investors can invest in DAO. Democratize the venture capital

- VC investment becomes liquid


So, invest of going out there and selling your investment position in a VC which is super hard now, you can sell your tokens in a DAO and transfer the ownership of your portfolio in an instance.


How cool is that!


How far we are from DAOs becoming mainstream?


I think in the next 5 years we will see this becoming a trend.


I am keen to talk to the people who are either invested in DAOs or running VC DAOs.


So feel free to reach out if you are involved in this.




P.S.: I am growing on Twitter. It will mean a lot to be part of your journey! So Follow me so we can engage.


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