An Overview of Our Micro-Venture Capital Fund For Crypto
Given the current media attention given to blockchain, it should be no surprise that the technology has transformed how industries and corporations conduct business.
What is it?
The blockchain is a new way to record and store transactions; at first look, it appears to be quite similar to the database or traditional ledger, except that the “blocks” are all cryptographically interlinked, providing a secure system against corruption, fraud, and other threats. Many cryptocurrencies, such as Bitcoin, Ethereum, and USDT, are built on blockchain technology, but its unique technique of securely recording and sharing data has applications beyond cryptocurrency.
How does it work?
Each “block” contains data — such as a proof of contract or transaction — that is securely linked to the rest of the blockchain via a digital signature. Users can conduct transactions almost instantly without going through a’ middle man’ because of this technology.
Even though the technology was first conceived in 2008 and first generally recognized as Bitcoin in 2009, it has only lately (almost 10 years later) begun to make its way into regular corporate practice.
What makes it interesting?
Because blockchain does away with the need for a central authority, it allows for a completely transparent world.
Here are a few examples of technological applications that could have a huge impact on people’s daily lives:
1. Fight Against Illegal Activity: Through its permanent ledger, the technology enables extremely accurate data tracking, making it difficult for people to engage in money laundering or the black labor market.
2. Financial Services: Blockchain technology has the potential to eliminate transaction costs, saving individuals and organizations billions of dollars.
That said, let’s not dive into our Micro venture capital for crypto.
Financely’s Micro-Venture Capital Fund For Crypto
At Financely, we make smart investments in various use cases in different market conditions. We take a risk-adjusted approach and invest across stages, geographies, and asset types. Blockchain technology is not the correct solution for every application, but we believe it has transformational power when it is.
Our Micro VC is structured similarly to a standard VC in terms of structure. The primary difference is the amount of money we invest and the stage. The crypto fund seeks out firms in their early phases in order to maintain a lower-cost basis and get greater equity. As a result, we can target projects that need sufficient funds to survive until a Series A fundraising round.
While a higher risk is associated with getting involved early, the smaller investment size for greater stock shares makes it advantageous. It reduces the number of successful businesses we need to invest in to see a profit.
The Fund, which has a target size of 250,000,000 USDT, provides exposure to all aspects of the cryptocurrency market. Within a 6 to 36-month cycle, the venture-style Fund will invest in small-cap crypto assets that we feel have long-term growth potential. We can convert the stable coins straight into those digital assets through both controlled and decentralized exchanges.
Funding Strategy
Financely will devote 20% of its capital to the most high-risk ventures that will provide the majority of the revenue upon exit. Those projects usually have a market cap of less than 5,000,000 USDT. The remaining 80% will be allocated to digital assets having a market capitalization of more than 500,000,000 USDT. USDC, DAI, USDT, and TUSD stable coins will be the Fund’s currencies.
Investment procedure
To invest in the Fund, you must review and sign the Information Memorandum and Co-Investment Agreement, then deposit funds in USDC to Financely’s Wallet. Investors who do not have crypto can order USDC straight through our OTC Desk for their placement. KYC approval is required, and network and currency exchange fees apply.
The Co-Investor will get investment returns in USDC, bitcoin, or Ethereum equivalent. The Co-investment Investor’s returns are calculated in proportion to their capital contribution.
If the Fund makes a loss before the lock-up period ends, Financely will sell all of the Fund’s assets and distribute the proceeds to the Fund’s Co-Investors. Disbursements will be made in proportion to the amount invested by the Co-Investors in the Fund.
Lock-up period
At the end of the investment term, automatic disbursements are made. A 12-month lock-up period is required, accounting for 1/3 of the investment duration. After the lock-up period, a Co-Investor can withdraw funds by filing a written withdrawal notification to Financely Group. Because trades must settle and the asset manager’s account must be rebalanced, the withdrawal process can take up to 5 days.
What about Investment yield
If the funds are held with Financely Group for 36 months, the Co-Investors will get a 15 percent annual return. Financely Group funds held for less than 36 months are not eligible for payout.
Dividends and Airdrops made to the Fund will be promptly distributed to Co-Investors in proportion to their investment. During the 36-month term, dividends will be transferred in USDC to Investors or re-invested by the Fund.
Transparency & reporting
Monthly reports will be sent out every first Friday of the month to Co-Investors. Also, an audited balance sheet will be shared with Co-Investors every 4 months.
Our team of seasoned innovators, investors, and advisors is committed to investing in early-stage ventures that have revolutionary technology and are set for rapid growth. We think that the most inventive crypto ideas will influence the future of our planet, and we have the ability to invest in these ideas. The business is looking to invest in seed, early-stage, and later-stage venture capital.
