Traditional VC Funding Disrupted by Token Equity

This Berlin Startup is Disrupting Traditional VC Funding Through Tokenized Equity

Article from Rebecca Campbell at NewsBTC.com
July 30, 2018

Traditional venture capital (VC) funding is often plagued with long and complicated processes, making it difficult for company founders to connect with investors.

For one company, that is creating the world’s first decentralized stock exchange in conjunction with Binance and the Malta Stock Exchange, it doesn’t have to be that way. Berlin-based Neufund is an Ethereum-based protocol for securities’ tokenization and issuance. It allows any type of financial asset to be tokenized and liquidized. It’s also aiming to bring disruption to the traditional VC markets.

Speaking to NewsBTC, Zoe Adamovicz, CEO and co-founder of Neufund, knows firsthand how hard it is to find and close investments. As an experienced entrepreneur and angel investor, Adamovicz decided to found Neufund with fellow founder and CTO, Marcin Rudolf, to allow startups, small and medium-sized businesses, and established companies to legally issue a new concept of asset ownership: tokenised equity.

Under German jurisdiction, the platform provides organisations with a legal and technical framework to conduct fully legal and safe equity token offerings (ETOs). Disrupting traditional VC funding, Neufund is doing things faster, easier, and bringing the necessary liquidity needed.

“We are a team of regulatory and blockchain experts, on a mission to change the way projects are funded,” Adamovicz said. “Our ultimate goal is to open creativity for good. We want to empower people all around the world, making it possible for them to pursue their projects and dreams.”

Neufund has announced the first six companies that will be conducting their ETOs with them: Brille24, an eyewear pioneer, Uniti, a Swedish electric car startup, Next Big Thing, a startup incubator for the Internet of Things (IoT) and blockchain ventures, mySwooop, an omni-channel re-commerce platform that buys and sells new and used electronics, Blockstate, a company creating products for the future of finance, and Emflux Motors, an electric superbike company.

It is these ETOs that are looked at as offering a new era of legal and secure ICOs. According to Neufund, equity tokens, serving as equity instruments, empower those with limited investing capital to use fractional ownership as a means of investing.

According to Adamovicz, a form of universal token that is able to represent real-world business will replace utility tokens as investment instruments. She believes it is only then that “the investor’s and issuer’s incentives can be aligned and economic models can be mathematically consistent.”

She adds that ordinary shares will be replaced with some form of programmable shares or technologically enhanced shares. Consequently, she believes that “security tokens will replace both the shares used in today’s financial world, and the utility tokens used in ICOs.”

Creating the First Decentralized Stock Exchange

Earlier this month, the equity fundraising platform announced that it was collaborating with MSX, an innovation vehicle of the Malta Stock Exchange, and Binance, one of the world’s largest cryptocurrency exchanges.

The aim is to create a regulated and decentralised global stock exchange for listing and trading tokenised securities alongside of crypto assets. With market equity tokens projected to reach $1 trillion by 2020, the partnerships will make it possible for companies to trade their equity in a legally-binding way on the biggest crypto exchange in the world, said Adamovicz. She adds that liquidity is one of the major values of equity tokens versus traditional investment assets.

“We aim to bring access to [an] international community of investors gathered around Binance, and thanks to MSE all trades will be secured with proper licenses,” she said.

Source:
https://www.newsbtc.com/2018/07/30/this-berlin-startup-is-disrupting-traditional-vc-funding-through-tokenised-equity/

Canada Venture Capital 2018 Q2

Canada Venture Capital 2018 Q2

PwC and CB Insights' Q2'18 Canadian MoneyTree report highlights the latest trends in venture capital funding in Canada.

REPORT HIGHLIGHTS:
FINANCING TO CANADIAN COMPANIES DECLINES FROM RECORD Q1’18 HIGHS
Total funding to Canadian companies decreased 7%, with $900M invested across 116 deals.

SEED-STAGE DEAL ACTIVITY INCREASES, EXPANSION AND LATER-STAGE DECLINES
Seed-stage deal share increased to 32% in Q2’18 after declining for three quarters in a row. Early, expansion, and later-stage deals all declined as a percentage of Q2’18 deals.

CANADIAN IOT COMPANIES SEE INCREASED FUNDING AND DEALS IN Q2’18
Investment in Canadian AI companies jumped to $169M in Q2’18, an increase of 104% over Q1. The sector recorded 13 deals in Q2’18.

Source: https://www.cbinsights.com/research/report/canada-venture-capital-q2-2018/

Healthcare venture capital funding to hit new high in 2018

Healthcare venture capital funding continues to pour into startups, and the pace this year is already expected to top 2017's total figure of $15 billion, according to data from the MoneyTree report from PwC and CB insights.

During the second quarter of 2018, healthcare companies raised $5.3 billion in venture capital (VC) funding across 216 deals, on par with the $5.3 billion raised during the first quarter.

Across all industries, venture capital-backed companies raised $23 billion across 1,416 deals—a new record, PwC found.

The healthcare sector was second only to $8.9 billion raised in 610 deals completed in the internet sector. Healthcare represented 15 percent of all VC investments during the quarter.

Not only were there more deals, but they appeared to be getting bigger. More than 45 mega-rounds raised $100 million or more, with the second quarter marking the third straight quarter with more than 30 mega-rounds.

Two healthcare startups were among the largest U.S. deals in the second quarter. California-based Allogene Therapeutics, a biotechnology company developing cancer treatment therapies, raised $300 million from venture firms Vida Venture, BellCo Capital and TPG Capital, which has also invested with health insurance provider Humana in the acquisition of Kindred Healthcare and Curo Health.

Grail, a disease diagnosis company based in California, also raised $300 million during the second quarter, with funding from Sequoia Capital China, Ally Bridge Group and Blue Pool Capital.

Beyond venture capital, the healthcare sector has also seen an influx of private equity funding over the last few years, though rising valuations have curbed the appetites of some potential investors in the sector.

Amy Baxter on HealthExec.com
July 16, 2018
Source: https://www.healthexec.com/topics/healthcare-economics/healthcare-venture-capital-funding-high-2018

Blockchain Startup Gamedex Raises $800,000

Seed Round to Build Platform for Digital Collectible Card Games like Pokemon

SINGAPORE, July 16, 2018 /PRNewswire/ --

Gamedex just raised $800,000 in a seed round led by Invictus Capital in order to build a Steam-like platform for blockchain-powered digital collectible cards and digital collectible card games like Pokemon, Hearthstone, Magic: The Gathering, and FIFA Ultimate Team. The global gaming market was worth 110 billion USD in 2017 and is projected to continue growing at a compounded annual growth rate of 6.2%.

In one of the first token seed rounds ever completed, investors purchased Gamedex tokens ("GDX tokens") instead of equity. Invictus Capital led the round, investing via their Hyperion fund. The Hyperion fund is a tokenized venture capital fund which prides itself on investing in the most talented entrepreneurs and visionaries in the blockchain industry.

Gamedex will not be selling any more GDX tokens until at least August.

Daniel Schwartzkopff, CEO of Cayman-based Invictus Capital, explained their rationale: "Digital Assets were a $35 billion market in 2017 and the cryptocurrency market has -- at times -- neared $1 trillion. The fact is, for all that blockchain is in the news, its biggest consumer use case is still untapped. I expect the nascent non-currency crypto-collectibles market to reach $100 billion by 2022."

This vision appears to be shared in Silicon Valley. With their investment into Gamedex, Invictus Capital joins the likes of Union Square Ventures and Andreessen Horowitz, who have both invested heavily in the crypto-collectibles space.

Individual angel investors who have made large investments in the crypto-collectible space include Fred Ehrsam, Co-founder of Coinbase, Naval Ravikant, Co-founder of AngelList, and Mark Pincus, Co-founder of Zynga.

Gamedex Co-founder and CEO Cameron Garvie added, "I believe that ecosystems which rely on a community to function should belong to the community they are built on, and we aim to do just that. We chose to bring Daniel and his team over at Invictus into our seed round due to their deep expertise and wealth of connections in the industry."

Gamedex is planning a public GDX token sale for late 2018.

https://gamedex.co/

Cash Flow Positive

Get Your Business Cash Flow Positive ASAP

July 7th, 2018

The biggest balancing act you’re always performing as a business owner is money out versus money in. And although profitability is certainly something you should be paying attention to, more than anything, the best metric to understand your short-term and long-term survival is by looking at your business cash flow. Specifically, whether or not you’re cash flow positive.

We’ll go through the meaning of cash flow positive, show you what good cash flow is, and what steps to take for you to get your business cash flow positive as soon as possible. Or, if you don’t have time to do the reading, watch this video below for the cash flow positive definition, and the essential tips you need.

What Does It Mean to Be Cash Flow Positive?

In order for your business to operate, you need money in the bank to pay your employees, purchase inventory or raw materials, and cover all your other operating costs. To do this, you use either working capital that’s been invested in your business or the money you’ve received from sales and receivables.

The problem comes in when an otherwise healthy company—one that makes more money than it spends, with a high demand for its product or service and a strong volume of growth—struggles with the timing of expenses relative to sales. Even if the long-term financial trajectory of your business is strong, you can quickly get into hot water with your business cash flow if you run out of cash by spending more in the short-term than you’re bringing in.

Why Being Business Cash Flow Positive Is Crucial for Survival: An Example

Imagine that over the course of a month, your company has a sales volume of $50,000. At the beginning of the month, you estimate your costs in rent, payroll, and raw materials at about $46,000. That leaves you with $4,000—in profit, right?

But a few of your bigger clients are other businesses for whom you had to send invoices for some of that $50,000. Some payments are still outstanding. And for a few more sales, you’re still waiting for payments to process through the credit card company—so that money hasn’t actually hit your business bank account. By the end of the month, you actually have a cash inflow of $45,000, with $5,000 in receivables still outstanding.

In that case, then, you’ve spent $1,000 dollars more than you made. 

So, although it’s true that a single instance of negative cash flow might be no big deal, consistent patterns of negative cash flow can be the downfall of an otherwise successful company. If this happens three, five, or 10 months in a row, all of a sudden you’re out tens of thousands of dollars. Even if a large contract comes through, you might not be able afford to cover your rent and pay your employees until then, and your business might not actually make it to the end of the year.

Business Definitions: Cash Flow Positive vs. Profitability

Many newer business owners hear the term “cash flow positive” and assume it means the same thing as profitability or “breaking even.” However, although the two terms are related, they’re not actually the same thing.  As it turns out, you can be profitable without being cash flow positive—and you can be cash flow positive without being profitable!

Cash flow meaning: When you hear the term “cash flow,” it’s referring to the total amount of cash that’s being transferred in and out of your business. In order to be cash flow positive, you need to have more money coming into your business than is going out at any given time.

Profitability meaning: Profitability, on the other hand, measures a bigger picture number. Your profit is what you have left after all of your expenses are paid. At the end of the year, did your business make more money than it spent? If so, you’ve turned a profit for that fiscal year—but you might’ve done so even while having several scary bouts of negative cash flow at various points throughout the year.

Read the full article on Fundara