Web 3.0 is Changing Venture Capital and Accelerator Models

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Venture capital has played a significant role in helping startups gain traction, but this process has had about a 1% success rate when it comes to launching unicorns. Thus there must be a better way for startups to break through the ceiling.  

This has led to developing a series of business incubators, such as venture studios and startup accelerators that have been successfully stewarding nascent startups towards higher valuations now for years.

Venture studios have been around since 1996, when Idealab first launched. Since its inception, Idealab has posted a 70% success rate, with 5% of its startups reaching unicorn status.

Venture studios build startups from the ground up, from the idea stage to launch, and hopefully towards a lucrative exit.

Recently, venture studios have become increasingly popular, and The Global Startup Studio Network has measured a 625% growth in startup studios in the last seven years. 

When ideas have turned into reality and startups want to scale, they can turn towards an accelerator to help them reach the next level.

Y Combinator, first launched in 2006, stands out as one of the most successful accelerators to date, and it’s responsible for helping projects become household names like AirBnB, Dropbox, and Reddit.

The combined valuation of projects that have worked with Y Combinator comes to over $300 billion.

Many of the tech unicorns that have started or grown thanks to studios and accelerators are part of what is called Web 2.0, and these platforms depend on the internet to deliver their services.

Like the centralized technology they depend on, these Web 2.0 unicorns are centralized services that are giving way to the decentralized services of the future. 

The next step in the evolution of the web, Web 3.0, promises to deliver a new stock of services powered by blockchain technology and the enhanced security and programmability these blockchains provide. Web 3.0 enables a future where users and machines can interact without the need for third parties.

Web 3.0, the decentralized applications (dApps) that power it, and the dominance of blockchain technology that makes it all possible are growing at a phenomenal rate.

For example, Ethereum, worth over $400 billion, has facilitated the birth of dozens of other unicorn projects built on its network, and a few of these projects, like Uniswap, Chainlink, and Polygon, have risen to valuations above $10 billion. 

VC investors have moved to take advantage of the opportunity denied to the open market. In most countries, VC investing is deemed “too risky” for the average person. To invest in a private company, funding round or become an angel investor in your own right, you need to be an accredited investor, which means holding a minimum net worth of $1 million or earning at least $200,000 in annual income. Unfortunately, both of those preconditions disqualify the vast majority of the population. This is unfortunate because becoming a VC, particularly for one of the large funds, can be a very lucrative endeavor and very profitable since VC funds invest in startups and crypto projects in the early stages at very low prices.

An innovator in the blockchain space, Blockzero Labs, is taking the next logical step in furthering the development of blockchain technology by decentralizing the kind of services championed by Idealabs and Y Combinator into an international, round-the-clock, and inclusive consortium for creating the next generation of unicorns. 

While Y Combinator will most likely go on to fund many great startups, the model simply does not align with the decentralized world.

What is Blockzero Labs?

Blockzero Labs is a decentralized venture studio operating as a decentralized autonomous organization (DAO). According to Blockzero, blockchain technology is like a universe ripe for exploration, and its combined services provide the tools for probing further into that universe than ever before. 

A DAO has no CEO steering the organization's decisions, so the community behind a DAO like Blockzero has the authority to make decisions on the organization’s behalf. Holding Blockzero’s governance token, XIO, gives its community the right to vote on proposals, determine how funds will be spent, as well as share in the success of the platform.

Through Blockzero, anyone with talent and initiative can help develop the next big thing in blockchain tech, and that’s a huge deal for the future of this rapidly growing sector of both business and technology. 

Blockzero is a project operating with a lot of moving parts in order to deliver its comprehensive services for building and accelerating Web 3.0 projects. It provides plenty of opportunities for people with talent, skill, and drive to take part in something as big as they are willing to make it themselves.

If there is one thing that the invention of blockchain challenges to the core it is this:

No intermediaries should be able to control or censor the creation, control, or transfer of value.

Through Ethereum and the growth of DAOs, we now have the ability to operate, vote, and coordinate autonomously. Implementing a DAO-like system of incubation can unlock the 98% of startups to get the resources they need to succeed.

Decentralized technologies are opening doors for millions of people to participate in a new wave of value creation based on merit more than connections and luck of the draw. Blockchain technology allows for platforms to operate transparently on open source coding that levels the playing field for everyone involved. 

Sources:

1. https://www.cbinsights.com/research/venture-capital-funnel-2/
   
2. https://theworldwecreate.net/insights/the-venture-studio-business-model-explained
   
3. https://hbr.org/2016/03/what-startup-accelerators-really-do
   
4. https://coinmarketcap.com/alexandria/article/what-is-web-3-0
   
5. https://blog.blockzerolabs.io/y-combinator-vs-blockzero-labs-the-astronomy-of-a-decentralized-accelerator-fcf295d9e0a5
   
6. https://www.youtube.com/watch?v=Ll7ZQVdlHmg
   
7. https://www.forbes.com/sites/cathyhackl/2021/06/01/what-are-daos-and-why-you-should-pay-attention/