Amidst the decrease in overall market capitalization, problems have been experienced not only by the crypto-community but also by VC companies and funds. To find out how the transformation of the market has altered the approach of significant venture capital investors regarding investing in blockchain projects, we conducted a series of interviews with thought leaders. Recently, we talked to ICONOMI and the TaaS Fund. Our next leader is Vladimir Smerkis, co-founder and was a managing partner at The Token Fund.
Smerkis is an entrepreneur and private investor in early stage blockchain projects from Moscow. Was a co-founder of The Token Fund, an author and host of the radio show “Silicon Valley,” which is about digital business and innovations on Radio Megapolis 89,5 FM. Managing Partner at Brandship.me, and former deputy vice-president for international development at Mail.ru Group.
What are the current main criteria for blockchain funds when choosing an investment option?? What features should a project have to enthuse you?
First, I look at the very general idea of the project, and if it’s realistic enough. Then, I check if the project’s team can achieve its objectives. Then, a very well made website. Also, the financial and economic characteristics that are adequate and clear, and the profitability of the coin that the project offers to invest.
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?
Sometimes it is determined by the project itself. Huge investments are not always a positive sign; it is better to be a fund that is diversified and perfectly balanced. A big check is not a guarantee of success, I’m sure.
According to recent research, 57.43% of ICO projects are at the idea stage and do not have a final viable product. Is it essential for you to have an MVP / fully-ready product?
MVP is and has always been one of the main criteria when it comes to choosing an ICO to invest in. On the other hand, there are solid teams out there, armed with very strong ideas, such as the Telegram team. But in any other case, at least a minimal viable product is a must.
Which projects are more convenient to work with – projects that were relatively unknown at 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?
As I’ve mentioned, diversification comes first. That’s why both types of projects can be in our portfolio.
In the crypto community, everybody is talking about the end of the ICOs. This is mainly spoken because of scams and ICOs with no working products. Is this the case or is it a made-up problem?
Speaking of the deep crisis of ICOs we should remember the sweet times from 2016 to 2018 when billions of dollars raised. Now the industry has become wiser, more educated, the level of expertise and its quality have significantly improved. However, the mechanism of an ICO itself is still a perfect option for getting money for a project when any other type of investment is just impossible. But there’ll be no quick cash anymore; the projects now have to fight for the funding.