Neufund raises €2M for its blockchain-based venture fund | Hacker News Reader

Neufund raises €2M for its blockchain-based venture fund

techcrunch.com

24 pointsptrptr10 comments

Direct investing in ICO is major risk for investors. There is very little due diligence and investors don't have downside protection and it's unregulated.

Instead of starting with complicated solution on blockchain, NeuFund is starting like a regular VC capital that will be doing ICOs for his companies. This way they will provide best of both worlds

that's right. thanks @kwikiel!

yeah good luck collecting on your equity when the company you "invested" in gets sold. How will they guarantee that the stake I've bought in the company is declared a legally mine? Will this ownership stand in a court of law?

You're right, maybe someone on HN can give us more info

hello i just responded above. feel free to ask me more questions :)

there is a paper investment agreement signed with startup that says that certain shares are represented as a tokens in smart contract and whoever owns those tokens has shareholder rights (voting power, dividends) etc. so owning tokens is no different than owning shares. this paper agreement has a corresponding smart contract agreement (they are linked via hash) and together they protect our investment both on blockchain and in so called off-chain world

hello @Validorn, I'm the CEO of NF. yes, this ownership will stand in the court of law. the ability to provide both classical legal and trustless-trust security to the investors is one of the key things of our IP and the innovation we have in our ecosystem of smart and legal contracts.

Seems like you could have done this without needing to use a blockchain... Do we have to use a blockchain for everything now?

you're right that one can do funds without blockchain. but Neufund is not just a fund. I think that the Geektime article below is descirbing it in a lot more detail than TC. http://www.geektime.com/2017/01/17/berlin-cryptocurrency-hyb...

what Neufund does, in short, is providing the way to fund ANY STARTUP with the ICO process on blockchain. not just Blockchain startups. that's the key difference between us, other funds, and also ICO process itself, which currently is reserved to Blockchain companies only.

> “If I am a founder, I have to wait until I sell my company to make some money,” says Adamovicz, explaining that the core of their innovation is the ability to make investment money much more tradable. “Our system is making this classically static, illiquid asset liquid. We make this money flow very fast.”

From the article you linked.

I take issue with that. Making it easy for founders to cash out before they sell the company is just going to make it easy for founders to exit on a bad investment while passing the loss off to whoever they can market the loss to. Founders need to stay financially connected to what the found and see it through to a proper sell or eat the cost.

A system like this will just create a ton of companies with "good" ideas where the founders then tokenize their companies, sell them off and then let them fail. Part of being a founder is having risk. If the risk is too much then maybe your idea is bad. If your idea is good, then the risk should not be a problem.

That all being said, still you could do this without blockchain. You could just as easy -- per your example -- reserve 5% of your company to be sold to individuals and not big investors or PEs. You could even still do Newfund without having a blockchain as well. So to me, using a blockchain is just a way to hype of a bad idea.

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