How Blockchain will Encourage VC Investments in Startups?

Out of millions of startups created around the world each year, only a few hundreds of them manage to secure funding from venture capital investors.

Even though VC investors are quite active nowadays and are generating quite a lot of profit from their investments, they are reluctant as always to invest in startups in their growing stage.

The reason why venture capitalists scrutinise businesses so much before investing in them is that VC funds spend millions of dollars into risky companies with no profits generated until then. And VC investors only put their money in companies which they believe has the potential to make profits in the future.

Why are VC Funds so Important for Startups?

The main reason why startups desire VC funds so much is that they bring in huge money. Venture capital investors are ready to invest in millions and billions depending on how valuable they deem the business to be in the future. This gives startups with enough capital to outgrow the competition and improve business conditions rapidly.

Also, venture capital investors are less likely to pressure startup owners to build profits quickly and give them enough time to grow and scale according to the business plan and current market conditions.

As VC investments are so high profile, it also builds trust and value on the startup thus increasing the popularity and fetching investment opportunities on a global scale.

How Blockchain will Encourage VC Investment in Startups?

As we mentioned in the beginning, despite the benefits startups have by gaining VC investments, very less number of startups actually increase VC funding in their growing stages.

However, thanks to the Blockchain technology and its features, venture capital investments now seems like a possible achievement for startups than ever before.

Below we have listed out some important ways how blockchain-backed investment platforms are enabling startups to gain VC funding effectively.

Tokenisation of Investment

Tokenisation is one major feature of the blockchain technology, and it helps investors to fund startups easily, diversify their investment, and invest in tokens directly as well.

For startup owners, tokenisation helps in gaining funding from any part of the world without having to pay any fee.

The URIS platform features one of the best implementations of tokenisation. The URIS Tokens offered by the platform allows investors to invest in startups of their choice directly and also gain higher liquidity for their investment by diversifying the investment.

Tokenisation also allows startups to raise funds by overcoming regulations regarding foreign investments and issuing of private shares.

Startup owners can accept funding regarding URIS tokens and also use the symbols to pay for freelance services that are offered from within the platform.

Unified Display of Business Plan and Data

Another great feature of the blockchain technology is decentralisation. Startups will be able to present their business plans and operational data within the blockchain platforms thus making it easier for investors to analyse the potential and efficiency of a business. Moreover, all the data will be highly secure and can easily be validated.

As all the operational data of the startup can be accessed in a single place, investors can also release funding based on the milestones achieved which makes scaling of funding easier for investors.

Access to a Pool of Startups

Instead of pitching to each investor, startups can make their business plans and operational data available to all potential investors thus increasing their chances of funding.

Moreover, investors can also get a detailed insight into a large number of startups across domains from all over the world and pick the ones that they seem valuable. Investors can also access the current trending business domains and make profitable investments as well.   

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