Neufund, a Berlin-based open venture capital fund, has raised €2 million from Christoph Maire’s Atlantic Labs, Klaas Kersting and a group of superangels, TechCrunch reported.
Founded in 2016, Neufund is building a blockchain-based and investor-directed platform which bridges the world of cryptocurrency and equity. The fund unlocks the resources of cryptocurrency and blockchain to fund startups and all forms of technological innovation and disruption.
Initial coin Offerings (ICOs) have become a very popular way of raising money by blockchain startups. However, traditional VCs remain skeptical for this method. Neufund plans to use the amount raised to build an open platform for investors to acquire startup equity in the form of tradable crypto tokens.
According to the official website, Neufund is an ecosystem of smart contracts operating on the Ethereum blockchain. It creates a new type of ownership that is neither money nor stock, but crypto tokens which represent equity and at the same time are as liquid as a currency. Such tokens have an intrinsic value to the network, but at the same time they also represent value of the business operating in the real – off-chain – world.
“In venture capital, both startups and investors have an almost illiquid asset position – transaction costs in and out of a company are very high. Money flows slowly – it takes about 5 years for a founder or a VC to capitalize on an exit, and about 10 years for an LP to get a return from a VC investment”, said Zoe Adamovicz, CEO and co-founder at Neufund, as quoted by TechCrunch.
Using blockchain and smart contracts allows Neufund to increase the speed of capital flow and diversity of tech innovation funding, and reduce transaction costs for investing.
“The transaction costs for issuing and managing such tokens are close to zero, investors can buy and trade equity in private companies and it makes essentially illiquid assets immediately liquid”, Adamovicz added.
