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Investments in blockchain technology are on the rise, but how do you get financing?Getty
With $ 19 billion invested only last year in European startups focused on AI, Blockchain and Quantum Computing, there is potentially a lot of funding for new companies.
But how are you financed?
Well, there are some funds right now that try to combine capital investment and blockchain technology. The TMT Blockchain Fund he is one of them. They are looking to make about $ 30 million in investments in a seed or a series A, with a further opportunity to invest later.
In fact, the fund's partners proved to be trendy spotters. Their previous investments were followed by Google, Microsoft, Bain, Didi and many other Silicon Valley unicorns.
But how does TMT identify a unicorn (market value of $ 1 billion – incidentally, the founders have already helped to create different ones) and what advice can they give to start-ups looking for funding?
Gina Clarke has discovered more.
About the founders
TMT has four founders, each with its own unique investment experience, and an experienced president, John Paton, who believes Europe is promising in the blockchain market:
A little like the Tortoise and Hare story, the firm, weighted and patient European corporate culture is about to move the Silicon Valley approach at top speed at no cost. "
Julian Zegelman is a prolific investor angel (with two unicorns, GitLab and Labs Protocol), a Blockchain pioneer and an early investor in numerous Blockchain startups.
The German Kaplun and Artyom Inyutin are the founders of the first Eastern European unicorn, RBC (RosBisunessConsulting), who have achieved a valuation of $ 1.5 billion and brought the company to the first high-tech IPO of success in Eastern Europe.
Igor Shoifot has created several successful startups and has chaired two high-tech accelerators in the United States, Europe and Asia. He has taught at the University of Berkeley and other major US universities for over a decade.
Together, the team has already created a very successful VC fund, TMT Investments, listed on the London Stock Exchange AIM. Although the fund is an early investor and the average valuation of a TMT portfolio at the time of investment was less than $ 8 million, it has already generated 11 profitable outlets and an average annual portfolio growth of 60%.
I asked Zegelman why now was the right time to start a blockchain investment fund.
Zegelman:
We consider it to be 3-5 years after a major wave of consolidation of Merger and Acquisitions (M & A), where large technology players will buy blockchain companies to implement blockchain-based products and services in their core businesses. This is what has happened with mobile applications, big data, machine learning, data science and other technology trends. We want our portfolio companies to be mature enough and well positioned to take advantage of this future wave of M & A. That's why 2018 was the perfect year to launch a VC blockchain fund.
In which areas are you looking to invest?
Digital ID verification and KYC / AML using blockchain: fighting identifying fraud and complying with EU and global regimes Know Your Client and Anti-Money Laundering is a laborious and complex task for many companies. Blockchain technology with its potential to lower execution and access costs to databases and its transparent and immutable data storage system can be a great tool for building robust KYC / AML international databases.
Cybersecurity – hacking attacks, data loss, online fraud, are all growing problems that sweep billions of dollars of value every day for consumers and businesses. Blockchain can be used in conjunction with existing products to build better and cheaper tools to combat cyber crime.
Fintech and digitization of assets – blockchain can be very useful for the financial sector, for example the digitization of stocks and bonds and digital trading tokens that represent the underlying real assets (real estate, raw materials, metals).
Digital Collectibles and Games – blockchain can be used to enhance internal economies in multiplayer online games (where virtual assets are swept by tokens), can also be used to digitize collectible items such as collectible cards of celebrities.
Business software: blockchain is used in different industries such as logistics, pharmaceuticals, banking and education, wherever it is necessary to eliminate a central repository of data and allow participants to quickly and reliably carry out transactions together .
How can startups attract the attention of potential investors?
Zegelman: the best way to attract attention is through a reliable connector. For example, the best intrus we receive is often through existing or previous portfolio companies. Nothing works better than an introduction by someone we have already invested in. It helps even more if the investment has been profitable.
Another good channel is the industry professionals whose opinion has a weight like the executives of the sector and other VC, angelic investors.
What attracts investors to your portfolio?
Paton: real investors are hungry for changes. They are not satisfied with the status quo in which most shrug their shoulders and say, "But it's always been like that." Become an investor because you do not accept that answer. And because you want to be part of an exciting journey looking for solutions through companies, you can help to build investing.
I was born in the ghetto east of Glasgow. When you were born under those circumstances, you understand the need for change. It has been a powerful motivational tool for my whole life. "
How can startups benefit most from investors?
Shoifot: Investors help with much more wisdom, help with contacts: to collaborate with employees with the right skills, with the press and with efficient PR and marketing agencies, with other investors and buyers, with partners and marketing channels and sale.
Startups that learn to take advantage of this access and knowledge can benefit from all the free advice and connections that VC vouchers are happy to provide. Startups should look for funds in which a start-up partner's relationship or partner and venture partner is less than 10. In the case of the TMT Blockchain fund, it is expected that there will be no more than 3-5 startups for partner / venture partners .
What makes a company a good investment for funds like TMT?
Zegelman: It is a combination of a compelling team (perhaps a great technical founder with an experienced business founder), core blockchain defensive technology (not available, difficult to replicate, has internal value for other companies in space), MVP available ( minimum workable product) and some of the first tractions (ideally revenue, can also be customers' pilots, recurring users and aligned distribution channels.
In other words, the company must be beyond a simple idea or prototype phase, and the skeleton of the future business must already be built.
Finally, what are your main forecasts for investments this year and why?
Shoifot: it's a difficult market, but if we were to advise, we would say:
Based in Dublin Wrike – Binds the distributed workforce in an intuitive and comprehensive online project management environment and for marketing and many other departments of companies in 100 Fortune 1000 companies.
Depositphotos in Kiev brings millions of photos and video photos at the fingertips of bloggers and media publishers.
In London, MEL Science creates a magical virtual reality experience for children studying science.
Considering that based on Tallinn PipeDrive it makes the relationship with sales customers easier than anyone who thought it could be before putting everything in the cloud and allowing sellers to access all the data from any browser.
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Investments in blockchain technology are on the rise, but how do you get financing?Getty
With $ 19 billion invested only last year in European startups focused on AI, Blockchain and Quantum Computing, there is potentially a lot of funding for new companies.
But how are you financed?
Well, there are some funds right now that try to combine capital investment and blockchain technology. The Blockchain TMT Fund is one of these. They are looking to make about $ 30 million in investments in a seed or a series A, with a further opportunity to invest later.
In fact, the fund's partners proved to be trendy spotters. Their previous investments were followed by Google, Microsoft, Bain, Didi and many other Silicon Valley unicorns.
But how does TMT identify a unicorn (market value of $ 1 billion – incidentally, the founders have already helped to create different ones) and what advice can they give to start-ups looking for funding?
Gina Clarke has discovered more.
About the founders
TMT has four founders, each with its own unique investment experience, and an experienced president, John Paton, who believes Europe is promising in the blockchain market:
A little like the Tortoise and Hare story, the firm, weighted and patient European corporate culture is about to move the Silicon Valley approach at top speed at no cost. "
Julian Zegelman is a prolific investor angel (with two unicorns, GitLab and Labs Protocol), a Blockchain pioneer and an early investor in numerous Blockchain startups.
The German Kaplun and Artyom Inyutin are the founders of the first Eastern European unicorn, RBC (RosBisunessConsulting), who have achieved a valuation of $ 1.5 billion and brought the company to the first high-tech IPO of success in Eastern Europe.
Igor Shoifot has created several successful startups and has chaired two high-tech accelerators in the United States, Europe and Asia. He has taught at the University of Berkeley and other major US universities for over a decade.
Together, the team has already created a very successful VC fund, TMT Investments, listed on the London Stock Exchange AIM. Although the fund is an early investor and the average valuation of a TMT portfolio at the time of investment was less than $ 8 million, it has already generated 11 profitable outlets and an average annual portfolio growth of 60%.
I asked Zegelman why now was the right time to start a blockchain investment fund.
Zegelman:
We consider it to be 3-5 years after a major wave of consolidation of Merger and Acquisitions (M & A), in which large technology players will buy blockchain companies to implement blockchain-based products and services in their core businesses. This is what has happened with mobile applications, big data, machine learning, data science and other technology trends. We want our portfolio companies to be mature enough and well positioned to take advantage of this future wave of mergers and acquisitions. That's why 2018 was the perfect year to launch a VC blockchain fund.
In which areas are you looking to invest?
Digital ID verification and KYC / AML using blockchain: fighting identifying fraud and complying with EU and global regimes Know Your Client and Anti-Money Laundering is a laborious and complex task for many companies. Blockchain technology with its potential to lower execution and access costs to databases and its transparent and immutable data storage system can be a great tool for building robust KYC / AML international databases.
Cybersecurity – hacking attacks, data loss, online fraud, are all growing problems that sweep billions of dollars of value every day for consumers and businesses. Blockchain can be used in conjunction with existing products to build better and cheaper tools to combat cyber crime.
Fintech and digitization of assets – blockchain can be very useful for the financial sector, for example the digitization of stocks and bonds and digital trading tokens that represent the underlying real assets (real estate, raw materials, metals).
Digital Collectibles and Games – blockchain can be used to enhance internal economies in multiplayer online games (where virtual assets are swept by tokens), can also be used to digitize collectible items such as collectible cards of celebrities.
Business software: blockchain is used in different industries such as logistics, pharmaceuticals, banking and education, wherever it is necessary to eliminate a central repository of data and allow participants to quickly and reliably carry out transactions together .
How can startups attract the attention of potential investors?
Zegelman: the best way to attract attention is through a reliable connector. For example, the best intrus we receive is often through existing or previous portfolio companies. Nothing works better than an introduction by someone we have already invested in. It helps even more if the investment has been profitable.
Another good channel is the industry professionals whose opinion has a weight like the executives of the sector and other VC, angelic investors.
What attracts investors to your portfolio?
Paton: real investors are hungry for changes. They are not satisfied with the status quo in which most shrug their shoulders and say, "But it's always been like that." Become an investor because you do not accept that answer. And because you want to be part of an exciting journey looking for solutions through companies, you can help to build investing.
I was born in the ghetto east of Glasgow. When you were born under those circumstances, you understand the need for change. It has been a powerful motivational tool for my whole life. "
How can startups benefit most from investors?
Shoifot: Investors help with much more wisdom, help with contacts: to collaborate with employees with the right skills, with the press and with efficient PR and marketing agencies, with other investors and buyers, with partners and marketing channels and sale.
Startups that learn to take advantage of this access and knowledge can benefit from all the free advice and connections that VC vouchers are happy to provide. Startups should look for funds in which a start-up partner's relationship or partner and venture partner is less than 10. In the case of the TMT Blockchain fund, it is expected that there will be no more than 3-5 startups for partner / venture partners .
What makes a company a good investment for funds like TMT?
Zegelman: It is a combination of a compelling team (perhaps a great technical founder with an experienced business founder), core blockchain defensive technology (not available, difficult to replicate, has internal value for other companies in space), MVP available ( minimum workable product) and some of the first tractions (ideally revenue, can also be customers' pilots, recurring users and aligned distribution channels.
In other words, the company must be beyond a simple idea or prototype phase, and the skeleton of the future business must already be built.
Finally, what are your main forecasts for investments this year and why?
Shoifot: it's a difficult market, but if we were to advise, we would say:
Dublin-based Wrike: binds the distributed workforce in an intuitive and comprehensive online project management environment and for marketing and many other departments of 100 Fortune 1000 companies.
Depositphotos in Kiev brings millions of photos and video photos at the fingertips of bloggers and media publishers.
In London, MEL Science creates a magical virtual reality experience for children studying science.
While Pipedrive, based in Tallinn, makes the relationship with sales customers easier than you thought before putting everything in the cloud and allowing sellers to access all data from any browser.
