A user’s guide to crypto capital venture
The crypto industry is maturing and many are quickly starting to compare it to the gold rush. With its maturity trends, traditional users and investors are beginning to flock to the crypto space. The first and the second quarters of 2021 were characterized by significant developments in the field of cryptocurrencies. The crypto market attracted both retail investors and traditional financial institutions looking to profit from the emerging trends of digital assets. Other institutional investors are on the rise, eyeing cryptocurrency seeing it as a viable and profitable venture. If you aspire to join the crypto capital venture, here is a guide on the stages of the crypto capital venture.
- Pre-seed stage. This is the ideation stage. At this stage, you aim to determine whether an idea can be turned into a product or not. This is where you derive funding from a circle of friends and relatives and does not involve equity. If at this point, you know the right people, you may involve private investors. Here you should create that confidence in your ability for the private investors to support your project.
- Seed capital stage. This stage is brief and should be the shortest funding round. At this stage, you test the viability of the product in the market. The startup determines market viability, and you can use a tool like the market potential analysis. This tool will help you provide a framework for conducting market research and know whether the product is worth putting on the market. At this stage, you can also involve private investors. You should, at this point, convince this private investor that their product is worth investing in. Here, you should use tools like financial documents like profit and loss statements, cash flow forecasts, and so on.
- Early-stage. At this stage, you are dedicated to further reiterations, sales, and marketing. This is the development stage. Here, you seek opportunities to expand your operations and improve your market reach. At this point, you already have a massive user base. To hasten your processes, you should use funds to build a capable team and solidify your product. At this point, you must invest in sales and marketing, human resources, business development, and customer service.
- Expansion stage. This is the last official stage. At this point, you should aim to expand the additional market and diversify your product lines. If you reach this stage, it means that you are already established, and you should aspire to introduce your products to international markets. At this stage, you should be generating enough income with a commercially available product. At this point, many external parties enter the investment management process, all with an eye on the company’s equity. You should, at this stage, host a funding round to increase your valuation before an Initial Public offering.
Cryptocurrency is in its early stages, and there is plenty of room for growth. Many are aware that this is where the future belongs and do not want to lose this opportunity. Although considered a traditional financing approach, venture capital is looking to crypto due to mainstream adoption.