There is no denying that blockchain is the wave of the future, but for some, it is currently considered too vague and intangible to consider investing heavily.
After the cryptocurrency crash earlier this year, the crypto market has seen massive corrections and some big recoveries. It may be understandable that this uncertainty persists but the VC blockchain fund Mocha Ventures He believes that these corrections are beneficial to the industry as a whole, and provide huge opportunities for savvy investors to enter the digital asset market at the right time with the right partner.
The team behind Mocha Ventures is on a mission to assure that “Blockchain networks and digital assets are ground-breaking innovations that will fundamentally reshape the global financial system, and investors must be able to participate in this transformation.”
By working with early-stage blockchain projects and offering professional data-driven solutions to digital asset investors, they offer a new way to understand and invest in the field.
Before partnering with Campden fortune in The 24th European Forum on Family Office In London on 1 and 2 November, Mocha VenturesGeneral Partners discuss how they are capturing some of the most innovative technologies in the blockchain revolution and why family offices should be involved…
You focus on early stage blockchain companies with global growth potential. How do you define those companies and what criteria must they meet?
Renato Brioni: As venture capital, we moved in 2020 from standard investments to blockchain because we saw great opportunities after one of our funds generated massive multiple returns on exit. We felt like this was something going on there.
We decided not to get involved with bitcoin and cryptocurrency because they are completely unpredictable. So we thought, why not be different? During the cryptocurrency meltdown in the summer of 2022, we analyzed over 200 crypto companies, discovering patterns that revealed to us what separates winners from losers. Of those companies, 100 companies disappeared, 60 companies survived and 40 companies flourished.
So we did a deep analysis and asked what it was about those 40 companies that made them so successful. As a result, we have identified seven different pillars of success that we now use in our due diligence – founder, team, go-to-market, technology, facilities, innovation, and community. This scorecard allows us to rank the seven things that successful companies have already named and helps us determine the potential return on our investment. We love due diligence, and we love that things are in order.
What would you advise family offices looking to get into blockchain venture capital but don’t know where to start?
Joseph Little:One of the hardest things for family offices when they first hear about blockchain is understanding what it all means — really, what’s the difference between a blockchain and my child’s World Of Warcraft account?
Our main goal, as a fund, is to make money, but our secondary goal is to grow this community. Just as we have seen how the Internet has evolved and become a part of our whole lives, we see the same thing happening with blockchain and how it will integrate with our technology.
So to help individuals, as well as to also help generate more income, we really believe in bringing tangible assets into the digital asset class, such as using NFTs to help facilitate real estate transactions. We believe that assets that a consumer, business or investor can see and use is vital to crypto and blockchain adoption – not just vital, but imperative.
Renato Brioni: If you look at family offices that invest directly in digital assets, which are usually led by the younger generation, our data shows that the allocation is currently around 2% of total family office assets. The problem is that if you’re searching globally, there aren’t currently many regulations around the world, with the exception of Europe and Dubai at this time. So when we spoke to family offices and tier 1 venture capital firms from Australia, Singapore and Dubai, they said that they were missing three things: “We need a regulated crypto fund. We want to sleep at night and know that the people we work with will not disappear overnight. And we want people who will take us through the uncharted waters of digital assets.
So when we help family offices, we sit down with them and explain that this can be a risky business if you don’t know what you’re doing. They need to work with someone they can trust, who is organized and has a previous record of success.
At the end of the day, we invest in blockchain and crypto projects; Solving real business problems, having existing users and paying customers, can survive and thrive in a bear market and explode in a bull market.
In the 2021 North American Family Office Report by Campden Wealth, we found that digital asset adoption is on the rise, with 31% of North American family offices already investing in cryptocurrency. However, there is still a reluctance to invest digitally, why is that?
Renato Brioni: There is perception and there is reality. The perception is that there is a whole group of people who will not invest in this area because they find it risky and do not understand it. If you don’t understand it, you won’t touch it.
Family office custodians may find it difficult to trust younger family members – the generation that most readily understands the benefits of digital assets.
When someone teaches you how to drive a car, they also have the ability to control the pedals. We let you drive but we can also control and guide you. Once you see some returns and you see that those returns are realistic, people start changing their minds.
Joseph Little:The truth is that changing hearts and minds will take time but people are turning to it. When Web 1.0 appeared in the 1990s and early 2000s, no one was going to sign a document and email it. But towards the end of Web 2.0, DocuSign appeared, and we realized that this was a non-fungible asset, and a true use case for the technology. Technology has now adapted or evolved – we now use DocuSign every day, it’s even admissible in court. Blockchain is just the next iteration, it’s a continuation of the internet we know and use. Where we were able to secure documents, now we are able to secure the privacy of the individual and these individuals also have the power and control over this information.
Mocha Ventures are Principal Partners at the 24th Campden Wealth European Family Office Forum in London on 1 and 2 November. For more information and to register, click here.
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