Crypto venture capital funding models

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Assalamualaikum steemians

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How are you?Hope so everyone would be safe and sound just like me as I am also safe Alhamdulillah....

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Crypto venture capital funding models is my today's topic to share with all of you guys.

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Crypto venture capital funding models are defined as different methods in which venture capitals show their investment in crypto and blockchain-related projects. Now these are some of most common models:

Equity Funding

Venture capital are used for making investments in exchange for production of equity in whole company most particularly in form of tokens or shares.

Token Sales

Companies issue tokens for raising of funds mostly by Initial coin offerings or Security token offerings.

Convertible Notes

Investors tend to focus on lending money to companies with option of converting debt into equity at wider stage.

Simple Agreement for Future Tokens

This a form of hybrid model which may combines elements of equity and sales of tokens.

Revenue-Based Financing

Investors may also be a cause of providing funding in exchange for giving a percentage for their company's revenue.

Project Financing

Funding could also be provided for some particular projects or initiatives instead of company as a whole.

Incubators and Accelerators

Programs that can provide funding, mentorship, and resources to some specified companies that are of new stage.

Corporate Venture Capital

If I talk about large corporations then they usually invest in startups and early-stage companies so that they may enhance innovation, development and growth.

Venture Debt

This is a sort of debt financing which may provide companies with approach to capitals without leaving equity.

Hybrid Models

These are combinations of above models, tailored to the specific needs of the company and investors.

When we have to choose a funding model then companies should keep in consideration some factors such as:

Dilution

The effects of equity funding at ownership and control.

Flexibility

The ability for adapting to change market conditions.

Risk

The risk level linked with each model.

Alignment

Alignment of interests among investors and company.

Scalability

This ability for scaling funds as company grows.

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Venture capital firms may also consider different factors like;

Market potential

Size and growth capabilities of market.

Competitive advantage

The company uniqueness value proposition and competition edge.

Team

The experiences, skills, and track record of team that are founders.

Traction

The progress and achievements of company to date.

By having a know how of different crypto venture capital funding models companies may make research based decisions related to how to raise capital and enhance growth in continuously evolving crypto and blockchain world.

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Thanks

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