New startups in the cryptocurrency industry need support, and CityBlock Capital wants to help. It was recently reported that they’ve created a tokenized venture fund called NYCQ, which has dedicated $20 million to startups.
https://t.co/MCKf8xU2wg | CityBlock Capital announces tokenized venture fund NYCQ to invest in startups @CityBlockCap announces tokenized venture fund $NYCQ for investment into NYC startups @Securitize_io @airswap
— CryptoNinjas (@crypto_ninjas) May 21, 2018
The necessary capital for this kind of fund comes from global sources, after which it is applied to local investors exclusively, but only if they have proof of profitable exits. The fund comes from the new partnership between CityBlock Capital and Securitize, which impacts their token sales. Once in full effect, the CityQ tokens from NYCQ will be listed on AirSwap. Along with this earned capital, CityBlock plans to support the investment partners with administration in the legal, back-office, and fund departments.
Rob Nance, who is a managing Partner for CityBlock, said,
“We’re addressing two major trends in venture capital as securities become digitized on the blockchain. Startups are seeking access to capital markets earlier in their life-cycles through token offerings, and there’s increased demand for liquidity among institutional investors. We believe the greatest opportunity for large returns in venture will be at the pre-seed and seed stage. Allocations in these deals are often given to local investors that have access to prime deal flow through relationships.”
Though the partners are not presently listed, the company will be making them public by June 15th, 2018.
Another managing partner, Jon Avidor, has been in the crypto ecosystem for over ten years, and his experience has shown him that micro-VCs spend too much time with fundraising and administration. This time wasted means that companies lose out on the time that they could use for vetting and supporting founders, which is essential for startups. The purpose of CityBlock’s service is that it “creates more opportunity for our investment partners to scale their impact across portfolio companies and drive greater returns,” says Avidor.
As more CityQ tokens are launched, CityBlock will help their investment partners work together by offering incentives. An advisor for CityBlock Capital, Kwame Anku, took advantage of the opportunity quickly. He said, “Throughout my career, I’ve experienced the impact of a strong investor network, whether it’s for sourcing capital or providing introduction, and I’m excited to work with CityBlock on building the future of community-driven venture capital.”
Some of the big problems in the VC industry today concern gender and racial funding gaps, but one of the areas of focus for CityBlock is to have a global investor network that eliminates these issues. Founder and managing partner of Backstage Capital, Arlan Hamilton, discusses the ability to create opportunities by, what he calls, “underestimated groups.” He says, “Many are advocating for blockchain technology as a solution for correcting institutional biases in our governing and financial systems. I’m working with CityBlock to ensure venture capital is equally impacted.”
A representative from AirSwap, Rob Paone, says that CityBlock’s role in this venture is a strategic move, since they’ll help to attract capital. They understand that the success of CityBlock is the same as success in the market and asset classes.
Other advisors for CityBlock Capital includes Anthony Pompliano of Morgan Creek Blockchain Capital, Kevin White of Genesis Block Capital, and Carlos Domingo of Securitize.