Page 78 - Cyber Defense eMagazine April 2023

Investors get a faster transaction

Blockchain technology is shaping the future of venture capital funding. The way startups solicit money
and investors trade and monitor their portfolios might both be fundamentally changed by distributed
ledger technology. The fact that blockchain permits quicker transaction times is one of its key advantages.
This is so that a third party's verification or approval of the transaction is not required. Particularly when
compared to the conventional banking system, this may save a tonne of time.

Blockchain technology also has the benefit of being more secure. This is so that every transaction can
be validated before being published on a public ledger. Due to this, it is highly challenging for someone
to fraudulently change the transaction history. The possibility for blockchain to upend the conventional
VC model is arguably its most fascinating feature. VCs now frequently make early investments in firms
before pulling out when they are sold or go public VCs may now invest in vouchers that represent shares
in startups thanks to blockchain technology. This enables them to benefit more directly and liquidly from
the company's success. Additionally, it more closely matches their interests with those of other
stakeholders in the firm.

In conclusion, blockchain technology has the potential to revolutionize the venture capital sector. It claims
to speed up, secure, and increase transparency in transactions. Investors may have more influence over
their portfolios and raising funding may be simpler for startups as a result. This might ultimately result in
greater innovation and better results for all parties concerned.

Investments are made to support the crypto-ecosystem

Venture investors have placed more bets on cryptocurrency start-ups in 2023 than they did in the last ten
years altogether. The venture capital divisions of cryptocurrency firms, whose continuing growth will be
dependent on the ecosystem's expansion, made a significant portion of the investments in the last few
years.

For instance, the investment arm of the Coinbase cryptocurrency exchange, Coinbase Ventures,
supports businesses developing infrastructure like Solana, a blockchain network; companies providing
crypto financial products like BlockFi; projects for decentralized finance, also known as DeFi projects,
where automated transactions are managed by code; and organizations working on the metaverse's
digital economy, where users trade digital goods for their virtual lives.

Coinbase Ventures closed more deals than any other venture capital company in the third quarter of
2021. The major objective of the investing arm is to promote the crypto ecosystem. The VC company
doesn't use return as its key criteria to assess Coinbase Ventures' performance. Blockchain technology
as well as the open-source database architecture that powers cryptocurrencies are projected to progress
the internet and eventually replace the incumbent IT behemoths, according to Coinbase and other
cryptocurrency startups.

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