Blockchain VC: The ICO/STO/Token — Investor Interface
Hi and welcome again, its been a long time since we wrote a new article, while its not Friday but we felt like writing this on a non Friday as a way of breaking the norm every little now and then.
We were observing the markets, businesses, and investments going through the crypto/blockchain hype and as per our efforts to escalate the the ecosystem of business and investments which PE and VC constitutes a major portion of it, as well as navigating the cryptosphere for blockchain ventures, we seize the opportunity to draw some of the criteria where Blockchain Ventures can map against in order to assure a recognisable and significant place within the futuristic investment universe.
Unless you have the killer idea and the passion and commitment to take it long term, you should satisfy the following as a minimum to get some listening ears from investors:
- A good fundamental model
- A good financial model (Historical financials if available or at least being revenue positive not necessarily profitable or cash flow positive)
- Traction
As per our market scan we have identified the following after cohesive deep analysis which ran over an extensive discussion panels with clients, projects, investors, and regulators, we here spot some of the key findings and conclusions:
- During 2017 a lot of capital (tons of money) have been lost in vain in crypto investments, which made investors so skeptical about projects (90%+ of ICOs either did not deliver or were scams)
- Investors no longer trust projects with no physical presence or representation regionally. (They need an office to step into and a face to talk to)
- Investors have become more sophisticated and favor ICOs (Utility Tokens) less and STOs (Security Token Offerings) or Equity Tokens more.
- Places like Dubai, Switzerland, Gibralta, among others are recognised as major blockchain centers and fundraising venues, but with Dubai attracting most of the attention and delivering the echo to the GCC region where most billionaires are located, most projects and investors keep tapping the city all year long in search for investments and opportunities
- UAE has a minister for Artificial Intelligence, Dubai Smart Government which has announced in cooperation with IBM the launch of the first Government Blockchain as a Service platform (BaaS) few weeks ago as well as setting a milestone for making all governmental transactions blockchain based by 2022 among its Blockchain Strategy, ADGM Abu Dhabi Global Markets has just released last month in collaboration with ISSA in Zurich a thought paper on the regulatory framework of cryptoassets, and Emirates Securities and Commodities Authority has announced that it will be introducing ICOs as a corporate funding option for capital markets
- Dubai is surpassing major capitals as the heart of the cryptoasset class and blockchain as well as a safe haven for family offices, private investments and institutional funds from Liechtenstein, Zurich, Geneva, and Luxembourg to name a few.
- Heavy weight investors are escaping major US and European cities due to high taxing brackets and institutions escaping tight regulations (MiFID II) in Europe to tax haven and investment friendly environments such as Dubai and Singapore, specially Dubai being a global hub connecting the world from east to west providing an advantage over Singapore, Bangkok, Hong Kong, Shanghai, and Tokyo in terms of accessibility, global presence of more than 190+ nationalities and the language barrier where everyone speaks English, in addition to the easy regulations, hassle free procedures, and 0% taxing (only 5% VAT has been introduced lately for certain types of businesses and is charged from customers and clients)
- Almost everyday there is more than one blockchain or crypto event taking place somewhere in the world, we have identified a few of the best venues for investment opportunities and fundraising through handpicking the best projects and heavily selecting legitimate investors and decision makers.
To our knowledge those are the ones who oraganise events where investment deals get secured and even some projects got funded on spot:
And for physical presence or representation in the region either as a project seeking fundraising or an investor searching for opportunities or even a business, it is very lucrative to setup in Dubai as a world meeting point and way more cost effective than major US or European cities.
There a punch of business centers and business clubs which offers turn key services and luxury executive offices as well as licencing and sponsorship services, as well as co working spaces and office addresses for rep offices, you may have heard of Regus, Servcorp, Wework, among others, there are a lot of business centers in Dubai, while some offer serviced offices, co working spaces and addresses, others provide consultancy, advisory, and licencing & sponsorship as well, where you can licence your business as an LLC, DIFC, DMCC, FZE, off shore company, or even just a rep office.
After spending a significant amount of time and effort and coming across almost every corner of the ecosystem we list the best business centers according to the votes we received
While Regus, ServCorp, and WeWork rank top respectively as the major dominants and world players but they don’t offer setup, licencing, sponsorship, or visa stamping services while others such as M Business Plus, and Spider Business Center do, both are located on the prestigious Sheikh Zayed Road at Conrad Dubai facing the World Trade Center with an easy access than most of other business centers. There is also Capital Club which is only a networking and gathering place and lounge located at the world renowned DIFC Dubai International Financial Centre.
If you are still a startup or an early stage blockchain venture (greenfield) you can consider joining the CEO Klub which is an amazing global initiative of collaboration between crypto and blockchain ventures globally at a very reasonable cost yet effective model for running events, pitching and fundraising.
If you are interested in discovering the business and investment climate in Dubai you can contact us for free advise on how to setup your business in Dubai or even setup a branch or a rep office for your business or company.
Read previous articles from #MBA_Fridays here.
