AICoin vs The Venture Capital Model

managing team work abstract

It is difficult to imagine a more mismatched battle than the one waged between Angel Investment Clubs or syndicates and the Venture Capital Industry in their mutual search for the next unicorn investment opportunity.

VCs benefit from deep pockets. Armies of analysts back their quest for high growth potential companies. They also benefit from a network of existing and prior client companies that create opportunities for cross selling and joint ventures, which can boost the value of new equity stakes faster and further than single investments. Given these advantages, how can independent investors placing their own capital on the line hope to compete? Quite simply, they can’t and don’t. The market has developed in such a way that VCs will cherry pick the more attractive investments during later funding rounds after business Angels have taken on the much riskier proposition of cultivating very early stage companies when their value is all guesswork based on potential and not actual performance. And for the assumption of this extra risk they are not given extra rewards but instead have to hope that their stake in a young business is not diluted out of existence by VCs coming in on later rounds that restructure the Angel’s share in the business out of meaningful existence.

This unfair advantage that the venture capital industry has over independent investors has led to the development of the AICoin ICO. AICoin will rebalance the power between angels and venture capitalists, giving business angels the chance to not only to lay claim to an ongoing stream of lucrative investment opportunities but to maintain the value of their investment stakes as well.

The true innovation behind the AICoin ICO is its structure which makes it possible for individual angel investors to gang up and “collectively” take on the big boys of the VC world. Unlike other investment focus ICO’s, the principles around the AICoin ownership structure is akin to a more secure version of the DAO. The token is structured as a collective of all coin holders with a defined strategy of profiting through both trading and investing. So instead of “investing” in a single ICO and handing the funds over to a development team working on a single project, the assets of all subscribers are pooled together. If you imagine a group of thousands of like-minded investors all pooling the power of their assets together, then you have an idea of the structure of the AICoin ICO.

This pool of assets is then traded by the Artificial Intelligence Models whose development and training as already been funded by First Global Credit with the aim of generating excess returns for investment … and this is where it gets really exciting. Because of the technological innovation of artificial intelligence in general, a great deal has been discussed about the A.I. aspects of the AICoin ICO and the way it is using advanced Deep Learning techniques to identify and take opportunities in the cryptocurrency markets. While this aspect of the ICO is truly exciting and makes the entire concept possible – it is in many ways simply a means to an end.

Once the A.I. models generate profits, 50% of the excess profits are put into a seed investment pool. The purpose of that investment pool is to advance two of the most exciting and disruptive technologies around today … Artificial Intelligence and Blockchain … the very two technologies that make the AICoin concept possible.

By utilising the Blockchain to provide a secure and transparent mechanism for voting on different investment opportunities, we can harness the combined expertise of all of coin holders. Collectively they can share ideas, express their concerns and, together, find the best investment opportunities. A true implementation of “The Wisdom of the Crowd”; a phenomena that has long been known to produce decisions that are superior to those forwarded by individuals, even experts in the field.

So … how does this model take the battle to the VC’s?

  1. Expertise. As discussed above – we operate as a collective of self-interested individuals. We are not working for a salary or investing other people’s assets – we’re collectively investing our own capital utilizing our combined expertise. For the benefit of ourselves and the start-up ecosystem.
  2. Constant flow of investment capital…And here is where the real beauty of the model becomes clear. Instead of investing the initial capital, we are investing the excess returns generated by the A.I. models. This provides a regular flow of new capital into the Investment pool and gives AICoin token holders the flexibility not just to invest the capital once but to invest again and again and again. When the next big opportunity presents itself The Collective will be there to take advantage of it.
  3. Ability to make follow on investments. And this is the game changer that gives AICoin and its token holders the edge over VC funds. The constant flow of new capital gives The Collective the ability to make follow on investments in our portfolio companies. Investments that increase token holder’s stake and simultaneously prevent The Collective from being diluted when a venture capital firm takes an interest in one of our companies after the idea has been proven.

Some in the VC market see the ICO model as simply another early stage funding vehicle and not really a threat to their business model; some have even dipped their toe into the ICO pool to raise further funds.

They’re missing the point. As with many industries that are ripe for disintermediation they don’t see that the technology they are experimenting in is about to make them redundant and herald in a new age of true investing independence for the masses.


About Sean Williams 109 Articles
I'm markets editor and journalist for DFN. I've been involved with crypto for over 4 years and am an enthusiastic advocate. At DFN I try and combine my knowledge of markets with my knowledge of crypto to give a good overview of changes in the financial aspects of cryptocurrencies.

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