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As the VP of Business Development for CommonwealthCapital.com, I have been given the honor and privilege of doing a deep dive into the world of Blockchain (from multiple perspectives: application, investment, development, etc.) in order to give a recommended positioning statement for the 20 yr old VC Firm.
Armed with a basic understanding of Blockchain, I jumped in with both feet.
NOTE: If you don’t know what Blockchain is, think it’s just for Bitcoin, or just want a better understanding, view this video here: https://www.youtube.com/watch?v=3xGLc-zz9cA
Let me just say… There is a lot of hype going on in the world of Blockchain when it comes to ICOs (Initial Coin Offerings) And though this hype is driving awareness, and pushing forward innovation, it’s also based on a lot of “what ifs” and speculation that’s being spun into miraculous stories of life altering innovation — in order to sell more tokens (the cyber currency being offered in the ICO)
Yes, Blockchain is the future, but the keyword here is “future.” If you listen to the hype, all of the banks, lawyers, and major institutions are going to be disrupted by this technology – tomorrow. When in fact, it will take a lot of years for this technology to become widely adopted by the “mega-systems” that currently support our economy and society.
That’s not to say there’s not “right now” opportunity.
There are currently many working examples of Blockchain application outside of Bitcoin (and cryptocurrency) such as end-to-end supply chain tracking and accountability for the diamond industry, and the verification process of non-GMO foods. Large companies like IBM, Microsoft and Amazon are also leveraging investment, research and application development in this space.
Through the ICO craze, we are seeing all sorts of innovative ideas using this crowdfunding process to get supporters and backers to help them bring these ideas to life. There are a lot of legitimate companies and projects, but due to the ease of entry into the ICO space, much like the early dot coms, too many promises are being made that can’t and won’t be kept by eager Entrepreneurs who are ill-equipped to deliver.
I am not saying there aren’t a heck of a lot of legitimate and capable opportunities out there. I’m just saying that the space is already getting crowded (imagine a couple of years from now) and trying to find the next best thing is like trying to find the proverbial needle in the haystack (especially this early in the game) – Again, very similar to the early dot com boom.
My point here is simple… Whether the company is doing an ICO or raising private equity capital, they still need to be properly engineered for success. ICOs that don’t have the proper corporate engineering in place to mitigate risks and maximize success are no more attractive than a private equity investment in this same position. Unfortunately, there is no regulation for this in the ICO market.
Savvy (i.e. Accredited) investors know how to spot a company that has been properly engineered for success. Many ICO investors lean more on the investment based on hype and the novelty of it all – due to the “gold rush effect” that ICOs are currently going though.
Here’s my plug for Sprocket and Commonwealth Capital… The companies that we work with gain access to the Commonwealth Capital Financial Architect™ (at no cost); a step-by-step corporate engineering platform that helps an early stage company prepare for investment, and success.
I am assuming that if you are reading this, you are most likely involved with, or are interested in a Blockchain venture. We are excited to work with new ventures, Entrepreneurs and developers and have established a “Think Tank” website to help develop and grow projects over at:
WHAT DOES THE FUTURE HOLD?
Although ICOs are attracting many who are only interested in a quick buck, the long-term play here is truly the best bet. The fact is, just like the early Internet, a lot of underlying and supportive technologies (like email for the Internet) will be developed that help move the Blockchain trend into becoming as mainstream as the Web itself.
This is where the true opportunity lies today.
The companies and ventures of today that are successful at supplying the tools and laying the foundational technologies that will run the world of Blockchain tomorrow are the ones that will become the Googles and Facebooks of the new Blockchain era.
As we know from the dot com IPO boom, a successful ICO doesn’t necessarily make for a successful company. Opportunity still must, unequivocally, be met by preparedness and competency.
In closing… It is the position of Commonwealth Capital and Sprocket Network to recognize, discover and cultivate prime opportunities in this space, gaining footing with proper corporate engineering, investment and support in order to help establish the foundation to what will become the Blockchain ecosystem of tomorrow.
Original article here: