Blockchain Technology
Blockchain technology is a transparent digital ledger of transactions and records that
are immune to change or deletion. Offering additional traits of increased security, lower
costs, time efficiency, and error resistance, blockchain has seen a rapid rise in interest
during 2017. The utility of blockchain technology is limitless, sparking the growing list of
companies, industries, and governments exploring its potential adoption. Cryptocurrency, otherwise known as digital currency or digital money, has played a
significant part in the scaling knowledge of blockchain. Cryptocurrencies are virtual
currencies which use blockchain technology – they hold no physical attributes and exist
solely in digital form.
Bitcoin is widely regarded as the public face of blockchain and virtual currencies, seeing
a rise in value of over 39,500% in the last 5 years. Bitcoin has grown as a tradeable asset
and it is estimated that over 6 million people hold Bitcoin as a digital asset and over
100,000 vendors worldwide now accept Bitcoin as payment for goods and services.
Other digital currencies have followed Bitcoin with over 1,500 cryptocurrencies in
circulation – some are designed to further the advances in blockchain technology and
others to provide financing for individual objectives. Bitcoin and Ethereum are leaders in
terms of market share, and account for almost 60% of a $486 billion market.
This increased understanding and awareness of blockchain technology, the rise of
Bitcoin as a tradable asset, and the growth of the network and the advancement of the
technological infrastructure have all contributed to an escalating number of financial
institutions announcing plans to invest and develop in this sector.
Recent years have seen the rise of the Initial Coin Offering (ICO), where a company
creates a unique cryptocurrency that is tethered to their product, service or blockchain venture and offers their currency for sale to the public. During 2017, this meteoric rise
of the ICO has grown to surpass the volume of funds generated by the traditional fund
raising process of Initial Public Offerings (IPO). This increasing trend not only makes ICOs
a challenger to IPOs, but quite possibly a successor.
The current commerce and finance market is evolving, technology is advancing, and
minds are opening to new opportunities. Blockchain, cryptocurrencies, and ICOs have
demonstrated that they very much intend to revolutionise the world as it is today.
Venture Capital
Venture capital is a form of financing that is provided by individuals, firms, or institutions to
small, early-stage, emerging companies that are deemed to have high growth potential
but don’t have access to equity markets. Such investments are generally classified as
higher risk as the companies are less developed, and capital invested is often illiquid.
However, when the right ventures are selected, these companies are capable of
providing impressive returns.
-SeadStage:The first external
investment that
helps get a company
off the ground.
-EarlyStage:Investment provided
to a company that
has successfully
proven its concept,
in order to accelerate
their sales and
marketing efforts.
-GrowthStage/SeriesA&B:Further rounds to provide
additional financial support
to grow the venture to its
next stage of development
usually through an
enhanced sales and
marketing strategy.
Within the venture capital space, the two most typically used structures are equity and
convertible debt. Equity is the issuing of common stock or preferred stock. Once invested,
equity is owned outright until some type of sale or liquidity event of the company. Unlike
debt, equity does not require repayment but is invested in return for a percentage stake
in the company.
Convertible debt is a loan which gives the holder an option to convert into equity. In
the event this option is not exercised, the loan will become repayable at some stage.
However, it is common practice for sophisticated investors to treat their loan investment
akin to an equity stake.
EQUI will be the gateway for a wider audience to participate in venture capital investment
opportunities.
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