Can You Invest in Venture Capital?
The answer is yes, but only if you’re among the ultra rich persons. If you are not, then the answer is no.
If you have a few hundred thousands of dollars to invest in, then you can find an opportunity to invest as a limited partner in a second tier venture capitals or become an Angel Investor directly to the startup/company. But it takes personal connections to participate. It’s probably harder to convince a venture capital to let you invest with them. The fact is, all the good venture capitals are oversubscribed, and those who would take money from strangers may not be legit, at least not top tier. The Venture Capital investment world is like a private club, the elite institutions that cost a fortune to join.
Before we dive in, let’s take a look at the difference between Angel Investors and Venture Capitals:
An angel investor is someone who puts their own finance into the growth of a small business at an early stage, also potentially contributing their advice and business experience. They might be a wealthy, well-connected individuals who’s decided to put some money in.
Venture Capital is more like a firm consist of few angel investors or professionals with funding comes from a variety of external sources such as pension funds, charitable foundations, insurance companies, wealthy individuals and international corporations. Most VC firms have associate and partner levels of employment. Associates usually meet with startups at the initial phase and find potential investments, while partners get involved when the deal becomes more serious.
Both Angel Investors and Venture Capital investments have been one of the main sources of funding for a lot of successful startups for the last few years. Usually they provide initial investment for a potential startup or company with hope to make multiple return of investments. For example, Accel Partners was set to make a 1,000x return from its investment in Facebook. The VC firm invested US$12.7 million in the company in 2005, and its stake was worth US$9 billion just prior to Facebook’s IPO.
But again, there is no way for individual investors to get involved. Especially for average individuals or group of community, who are willing to invest in a potential startup company.
By creating a blockchain-based investment platform, Equi Capital is bridging the gap between individuals with Venture Capital investment world.
The Equi platform will tokenized the VC fund which is backed by EQUITOKENS. Here is how it works:
Individuals buy EQUITOKEN → Equi Capital will select the most promising projects → Individuals invest their EQUITOKENS through smart contract → Money invested in the projects → When the project is successful, 75% of net profit will be returned to investors EQUI wallets.
Each investment opportunity will go through an extensive validation process before it is placed on the EQUI platform for investment selection by EQUItoken holders. The extent of EQUI’s input continues post-investment, adopting an active asset management role to successfully steer the portfolio towards exit.
This is a revolutionary way to invest in traditional venture capital. Anyone can now participate and decide to invest in any potential startup company without limitation of amount to invest. This means that anyone can enjoy the maximum profit from the successful startups which previously can only be enjoyed by high net worth group of individuals.
Equi is backed by team of professionals in VC investments led by Doug Barrowman and Barones Mone of Mayfair, OBE. Equi Capital is launching an ICO for early adopters who wish to join the movement and grab the opportunity to invest in traditional venture capital. The token sale will enable the acceleration of technical development and all other aspects of the business, including infrastructure and additional personnel.
