Venture capital (VC) investors make a lot of money as they invest a lot of it in the early stages of a company’s life. They can invest before projects are fully developed and before they reach the public.
Naturally, this is a significant advantage over regular people who want to invest. However, DAOs and Web3 technology can change this and make VC more accessible to the general public. That’s precisely what we are here to discuss today, but first, we need to explain how VC works.
What Is Venture Capital (VC) and How Does It Work?
Venture capital, or VC for short, is two things — financing assistance from investors to startups and a form of private equity.
This type of equity typically comes from affluent investors, large financial institutions, and investment banks. They use VC funds to offer financial or sometimes technical and managerial assistance to startups and small companies looking to grow.
Naturally, VC is always risky as its goal is to fund businesses of enormous potential — startups offering a unique service or technology and companies that have the potential to become truly massive.
In most cases, VC funds provide financial assistance in the early stages of a company’s development, but they can also come in later stages.
The important thing to know about VC is that it has a crucial role in stimulating innovation in the modern world, and it’s often the only way for small startups and entrepreneurs to bring their innovative and potentially revolutionary ideas to fruition.
The way venture capital works is relatively simple. A typical VC deal means the company receiving the funding is divided into significant ownership parts sold to specific investors. This is usually achieved by venture capital firms creating independent limited partnerships (LPs) that are used to sell these ownership chunks to investors.
Venture Capital Isn’t Accessible to the Public
Regular people are increasingly interested in investing, just like private equities and venture capital firms. However, this is not generally accessible to the public, especially when it comes to venture capital.
As we’ve already discussed, VC firms and investors get to fund startups at the early stage when the company has not yet gone public. Others can only start investing when the startup enters the public sphere, but at that point, the best opportunities are already gone.
This is one of the biggest problems with venture capital today, at least in the eyes of regular investors. That’s mainly because the modern world is different, and novel technologies, services, and products are entering the market more often than before.
People want the chance to invest in them, but they usually get it when it’s already too late, and their investment won’t be nearly as worthwhile as that of VCs.
One of the best ways to solve this is to turn to DAOs (decentralized autonomous organizations) and Web3 platforms.
Role of DAO and Web3 in VC
DAOs are increasingly entering the market due to the improvements and overall benefits of Web3 and other decentralized technologies. The good thing about this is that they are bringing some previously inaccessible things closer to the public.
The same thing can be said for venture capital. DAOs and Web3 technologies can make it easier for regular people to start investing in startups.
This is possible through DAO-generated venture capital funds that everyone can use. Thanks to decentralization and blockchain technology, such funds make investing more accessible to the masses as they make smaller investments possible.
On top of that, they can also make it safer as such funds can be better insured against failed investments. If you were to invest in a risky crypto project on your own, you’d face high uncertainty, as the investment could go wrong quickly.
However, thanks to the expertise of VC firms and investors, a DAO-generated VC would make sure the funds always go to projects that have the best chance of panning out.
The good news is that we already have that in the form of a project called Hectagon Finance. It’s the world’s first DAO-generated Web3 VC funding platform. It was made for everyone and built by crypto veterans who wanted to provide regular people with access to experienced VC networks.
Hectagon is also planning its token generation event on the 8th of August, so you can be confident that the project is moving forward.
With the added security of DApp solutions like Serenity Shield, which uses smart contracts to offer unprecedented levels of security online, a VC funding network can also benefit from robust security features for every user’s digital assets. Serenity Shield is one of the few robust security solutions on the market. They recently announced a strategic partnership with Digital Insights, a notable digital asset consulting firm.
With solutions like Hectagon, VCs will become fully available to regular people and smaller investors. And with the help of security solutions like Serenity Shield, you can be confident that your digital assets are always safe and ready for investing.
Bottom Line
The world is moving forward, and even traditionally highly reserved private equities like VC funds have to move with it and reach the public. Incredible opportunities only VC firms and investors get no longer have to be reserved for the rich few.
With the help of DAOs and Web3 platforms, regular people will finally get the chance to benefit from VC networks and make investments in companies in their earliest stages of evolution.
