Hack Fund: blockchain venture fund’s analysis
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Security Token Offerings, the new trend in Investment and Financial services industry
Security token offerings-STOs have been taking the crypto space by storm this year. With governments worldwide imposing sales regulations on ICOs, Blockchain enterprises and crypto-enthusiasts are looking for a viable alternative. STOs appear to be the answer. Last year it was observed that the number of STOs saw a meteoric rise as the number of ICOs tapered. Data suggests this trend can be extrapolated to this year as well.
To know more about why 2019 could be the year of STOs check out InWara’s article
Investment and Financial services STOs gaining momentum
In the past two years, several hundred startups have popped that aim to mitigate the issues faced by enterprises in the Investment and financial services industry, raising over $2.5 billion between them. This industry seems to be of particular interest among entrepreneurs and investors alike, this could be because of the massive potential for growth in the industry that motivates them.
With that in mind, the following STO is noteworthy as they managed to stand-out amongst the myriad of startups in this sector.
The first US Blockchain venture fund?
This American company recently made news when it allegedly became first U.S. Blockchain venture fund, and plans on raising over $100 million. Hack Fund according to the company’s website is a publicly-traded venture fund for global technology. The company aims to give early stage funding for startups using digital share certificates.
Jonathan Nelson, co-founder of Hack Fund, believes traditional venture capital has failed startups and his company can mitigate some of the issues, leveraging its unique business model. According to an interview with Forbes, Jonathan was quoted saying “Hack Fund represents a new business model. Because Hack Fund leverages the blockchain, investors all over the world at all levels can participate in startup investing by trading blockchain stock certificates. Also, its SEC compliant structure means that it is also available to a limited number of accredited investors in the US.”
The founders of Hack Fund, Jonathan Nelson and Laura Nelson, were also responsible for spawning the birth of the Hackers/Founders group. A tech entrepreneur group based out of Silicon Valley, that now has over 300,000 members in over 50 countries according to the group’s website.
This huge network of techies and tech entrepreneurs supposedly gives Hack Fund a unique global reach. Hack Fund aims to be useful to investors by providing quick liquidity with Blockchain technology, by being able to buy tokenized stock certificates which can be bought and sold instantly.
The Berkshire Hathaway of Blockchain ?
Hack Fund will be a publicly traded close-end fund. Similar to how Berkshire Hathaway operates, the company’s venture investments will be valued on a quarterly basis by external parties. The company aims to encrypt the auditing reports and post it on a blockchain network, so token holders can assess it.
The founders claim Hack Fund operates to how Berkshire Hathaway works. Jonathan was quoted saying “There are no K-1 statements issued, there is no partnership/LLC, rather HACK Fund is an investment company akin to Berkshire Hathaway which invests in the same manner as early-stage venture capital.”
Ambitious plans of Hack Fund
Recently Hack Fund signed a partnership with Vodafone to invest in 15 companies a year that has the potential to grow to a $100M a year in revenue, across 100+ partner telcos and 1.2 Billion customers globally.
Number of STOs by region
Source: InWara’s ICO+STO database
According to data compiled by InWara, US leads STO offerings followed by Switzerland, UK and Singapore. The number of STOs in the US stood at 91 of which only 8 have failed to raise adequate capital.
Security Token Offerings (STOs) according to industry : Country-USA
Source: InWara’s ICO+STO database
Amongst the 91 STOs in the USA, Financial services was leading will allied sectors such Trading and Investments also in the significant top. Real estate STOs not surprisingly came second.