Switzerland-based investment firm Crypto Valley Venture Capital (CV VC) announced the launch of its “Genesis Hub” incubator in Zug—dubbed Europe’s Crypto Valley—wherein it will aim to support up to 60 blockchain-based startups every year starting 2019, according to an article published by local media outlet SwissInfo on September 20.
But the private equity vehicle has ambitious plans, as it intends to collect up to $100 Million to fuel its ultimate goal, which is to help 1,000 blockchain startups take flight every year. Furthermore, it intends to go global, as CV VC CEO and Co-Founder Mathias Ruch said that blockchain “is a global phenomenon so we could expand anywhere in the world.
Incubating Blockchain Startups
Those who have been chosen by the said firm will have to undergo its kickstart program which will last for three months, wherein they will be given $125,000 in seed funding. But for the most promising startups, CV VC will decide if they could be given additional funding. In return, the equity vehicle will receive a stake in their business of up to 8 percent via digital tokens or shares.
As for initial coin offerings (ICOs), Ruch said that the crypto funding aspect has not yet attained its full maturity. He believes that ICOs and initial public offering (IPO) will merge into a new and better model of startup financing, which has better checks and balances, thereby protecting the best interests of both investors and companies.
Crypto Valley Association Vice President Vasiliy Suvorov agrees with Ruch, saying:
“ICOs will continue to be a useful mechanism but they will no longer be core to the blockchain economy. We have had all the hype about ICOs, and now we need a model that takes all these great technology ideas and brings them into the real economy.”
Zug, Switzerland has been known for the fertile soil it provides to crypto and blockchain startups. Beginning 2013, the town has seen the establishment of over 600 blockchain companies, including Bitcoin Suisse, ShapeShift, and Xapo. Due to the density of these startups, they have decided to form the Crypto Valley Association—where Suvorov is Vice President—to advance the cause of blockchain in the region.
Consequently, the association accepted the new guidelines from the Swiss Bankers Association (SBA) to its members regarding the treatment of blockchain companies in the country. The announcement, which was published on September 21, gave specific details regarding ICOs.
According to the outline, companies which do not intend to launch ICOs in raising funds should not be treated any differently from regular Small-Medium Enterprises (SMEs).
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