We have discussed earlier how venture capital investors pour capital into NFTs; Katie Haun is splitting from Andreessen Horowitz to create a crypto investment megafund. In the beginning, Haun believed she would raise $900 million. This estimate proved to be a lot too conservative.
Haun has raised an astonishing $1.5 billion straight out of the gate. It is the most significant venture capital raised by an individual in business history. It also shows how much excitement is brewing about blockchain technology and cryptocurrency.
Outside Haun's involvement, her self-titled fund will maintain a share of a16z's corporate know-how: the company a16z and founder Marc Andreessen and in charge of crypto division Chris Dixon all contributed funds to raise this new venture.
Haun will divide the money into two crypto funds: She's allocated $1 billion for growth capital for established blockchain firms, while she's allocated the $500 million remaining for companies in the early stages of their development.
It's astonishing how many venture capital funds continue to enter the crypto industry such as this. Some have said that it's as if we're getting into bubble territory.
If we look at traditional venture capital raises that are high-tech, the entire capital raised is utilized by the startup to develop the product. This is not the case for blockchain companies. It is all about "Web 3.0" incentives.
For example, in Web 3.0, a platform can offer cryptocurrency to help developers create within the framework. This enhances the performance of the platform and attracts more consumers. This often means that the value of the platform's cryptocurrency increases, and the developers are rewarded.
GameStop and its partner Immutable X allocated $100 million in rewards for developers. With the possibility of $100 million in cash to be won and a chance to earn a profit, we can be confident that developers will be flocking to GameStop's NFT platform to have an opportunity to make money.
Venture capitalists have realized that incentives are essential in getting crypto-related projects quickly. Therefore, they weigh the necessity of this type of "incentive" capital with each investment.
The venture capitalists know that blockchain-based companies require this type of capital, so the typical raise for a business that operates in the cryptocurrency space is much more significant than usual high-tech rounds. Venture capitalists have to anticipate the demand for this type of investment, so their raises are significantly more powerful.
This article was printed from TradingSig.com