The Rise of Blockchain - Part 4
Last year token sales grew nearly 100x from Q1 to Q4 with the total raised by ICOs hitting $3.23bn in Q4. During this same time, digital assets outperformed traditional assets by nearly 13x. Some of this growth is being driven by highly reputable financial institutions, such as Andreessen Horowitz and George Soros, allocating investment to this emerging asset class.
At the end of 2017, Fred Wilson analyzed this frenzy against the Carlota Perez technology surge cycle. A framework which Carlota Perez created after studying all of the major technological revolutions since the industrial revolution and how they were impacted by and how they impacted the capital markets. The two main phases of the framework are the installation phase when the new technology enters the market and the deployment phase when the new technology is adopted by mainstream society. What Fred argued is that 2017 was the year blockchain entered the frenzy phase. The massive growth in ICO funding in 2017 is going to help to build out the infrastructure of the decentralized Internet in 2018 and beyond.
The future of the equity markets are going to be defined in the next few years. While discussing the future of capital formation with Goldman Sachs in November of 2017, Naval Ravikant noted:
“More and more of capital formation’s going online, more and more of it is being distributed geographically, more and more people are getting to play. And liquidity is coming back into the equation sooner, which I think is great news for all investors.”
The creation of Equity Token enables this new world of new possibilities. Founders can fundraise from larger pools of investors, and can accurately manage and transfer the equity in their company. Investors get access to more dealflow and can seek liquidity soon on secondary markets for security tokens. Employees can work for a company and know that a vesting schedule actually means something. Equity Token operates with these individuals at the intersection of traditional venture capital and new crypto capitalist models, while meeting compliance regulations.