The cryptocurrency market is currently entering an unavoidable period. In contrast to eight months ago, investors need to make their decisions much more cautiously. In this type of market only venture capitalists that really understand the crypto market and have the capability to identify real projects that will bring true value to the emerging industry can flourish. We had the privilege of interviewing Ruslan Gavrilyuk, Co-Founder of TaaS Fund where we tried to understand what criteria projects should meet to obtain investment now.
Token-as-a-Service (TaaS) Fund is a last-generation tokenized closed-end fund, actively contributing to the development of the blockchain ecosystem. TaaS introduces an innovative Token-as-a-Service business model that allows TAAS token holders to capitalize on the rise of blockchain markets without the hurdles, risks, and technical barriers associated with owning, transferring, and trading cryptocurrencies and tokens. The total capitalization of all TaaS assets in USD(T) equivalent is more than 15 million.
Mr. Gavrilyuk has more than 15 years’ experience in founding and managing large-scale projects all over the world. Realizing the urgent need for accessibility, security, transparency, and mutually-beneficial decentralized activity in finance, he turned his focus to crypto and blockchain assets projects.
He is a co-founder of Kepler Technologies (Zug, Switzerland), which is designing the first single-gateway intelligent platform for blockchain markets. Ruslan is an advisor on numerous successful projects, a founding member of the Blockchain Investors Consortium (BIC), and President of Karma International – Kyiv Chapter. He’s actively participating in blockchain events, as a regular speaker at Keynote events and the d10e Conference, and a jury member of ICO Pitch Competition by d10e. Ruslan is the winner in the nomination for Advisor 2017 at the BTC-Awards CIS countries.
What are the current main criteria for blockchain funds when choosing an investment object? What features should a project have to enthuse you?
At the first screening, we do pay attention at the problem the company is trying to solve, the team, their vision, integrity, community engagement, time-to-market approach, scalability, real sector solution implications, technology and product, token economy, basic financials, and legal status. Among the most important features that a project should have is the value the company is giving to the public. To de-risk their future development and product deployment, there needs to be security and professional management of the funds after the fundraising campaign.
What determines the number of funds invested in the development of any project? Why are you ready to invest tens of millions of dollars in one project, whereas only a hundred or so in another?
The investment decision process usually takes place after an exhaustive DD and includes a couple of stages. It also depends on the company valuation, the total cap, use of proceeds, market growth, mid or long-term investment, and the correspondence to the fund strategy and investment policy. That usually cannot exceed a certain percentage of the fund’s AUM, and certain in-house developed algorithms.
According to recent research, 57.43% of ICO projects are at the idea stage and do not have a final viable product. Is it important for you to have an MVP / fully-ready product?
These are very optimistic assumptions. We all have been witnessing the avouchment era for the last decade, with all that it implies. Some ICOs had really successful campaigns having no MVP or idea how they were going to achieve the tech and business milestones; they just had a strong vision. Now we come across different product completion stages – from ideas to sustainable companies with a solid functioning product.
Which projects are more convenient to work with – projects that were relatively unknown in the beginning stage, but are bold technological startups like Ethereum or Binance, or other projects that have strong support from the very beginning, such as IMMO for example?
Ether or BNB tokens may be far more liquid due to a wide network effect and community reach, but its yield may be noticeably less than some of the more early-stage projects, like Bancor or Melon. The latter category does not (yet) have daily media coverage, and its markets are prone to higher slippage, but in the long-run, these assets might generate a higher yield.
In the crypto community, everybody is talking about an ICO crisis more and more. However, it is mainly spoken of because of scams. Is this really the case or is it a made-up problem?
ICOs are evolving and will keep on moving forward not only for the public but for the traditional financial institutions. Usage of the ICO model as the only investment vehicle, inventing new problems and solutions, just to have a blockchain or token model somehow related to the project despite a lack of reliable data, investor protection, and legal restrictions. These aspects may have caused the current drop of investment activity among the crypto community. There have always been good and bad projects which have not had the best intentions due to different reasons. As for the blockchain market in general – we see that an increasing amount of institutional investors, that are participating in different investment rounds, deploying their dry powder by means of hybrid investment instruments.