Vnx Exchange Set To Unlock Liquidity For Venture Capital Industry, Announces New Board Member.
VNX Exchange has announced the development of a decentralized marketplace and trading platform, where investors and accelerators can buy and sell tokenized investment portfolios of venture capital funds via its press release. The exchange also added Dominique Valschaerts to its Board of Directors. Valschaerts is the former CEO of the Brussels Stock Exchange and former member of the Executive Committee of the Luxembourg Stock Exchange.
Venture Capital (VC) is one of the world’s major drivers of innovation, entrepreneurship and economic growth with $169 billion in investment funds and over ten thousand (10,000) companies funded every year. It has enabled hundreds of technological breakthroughs and aided several great companies that have shaped the world, driving the digital and information revolution of the 21st century.
According to research, 43% of public US companies are VC backed, and up to 82% of companies’ R&D expenses can be traced to VC-backed companies. Some of the world’s most significant companies, such as Apple and Amazon, were created with the support of venture capital.
However, for many years, VC has remained a relatively small industry, closed off to the majority of regular investors. The reasons are not far-fetched. Investing in VC requires significant market expertise, reliable networks and years of experience to find, assess and manage quality investments. Deal structures are often so complicated that in some cases legal documents can exceed 200 pages.
Speaking with CoinJournal, Alexander Tkachenko, Founder, and CEO of VNX said VNX Exchange’s goal is to “unlock the industry to ordinary investors” around the world by leveraging the new wave of “innovation taking place in the financial industry.
“VNX Exchange is building a regulatory compliant digital asset marketplace aimed at bringing liquidity to the $620 billion global venture capital industry. Our goal is to make it extremely easy and cost-effective for any professional VC investor to get liquidity and raise additional capital through the VNX platform.”
It takes an average of 10-12 years for a VC fund to return capital to their investors and individual investments rarely permit exiting before 5-7 years. To invest, one is expected to commit over $100,000 for every single investment along with a high diversification risk. Investing in a VC fund generally requires at least $1million capital, which is a barrier to entry for most would-be investors.
To establish a balance, VNX Exchange believes that the key to solving the VC problem is to bring in liquidity, thus unlocking the market for existing and new investors. The platform’s aim is to reduce the barriers to entry for regular investors and open venture capital as an asset class to a much broader global investor base by creating a regulatory compliant and secure marketplace in the heart of Europe.
“VNX set out to solve the VC liquidity problem by combining the know-how and best practices from today’s capital markets and the emerging cluster of new technologies and business models, enabled by the blockchain,” Tkachenko noted.
To this end, investment portfolios of VC firms will be tokenized, making them tradeable on a liquid secondary market where startup accelerators will open them up for trading in a secure and investor-friendly environment. In turn, this will stimulate an influx of new capital into technology, innovation, and entrepreneurship, making the VC industry much more inclusive.