What is Liquid Venture and Why it is Important
Liquid venture is a new and novel concept, it pairs the best attributes of liquid public markets and stratospheric venture capital-like returns.
How we traditionally think about markets
Public markets are characterized by their high levels of liquidity and transparent information. Blue chip assets trade billions and billions of dollars per day allowing investors to move freely in and out of them. Issuers provide regular updates to their investors detailing operating results and financial condition.
Private markets look much the opposite. Closely held businesses are notoriously illiquid and information is rarely if ever shared. In many cases, investors must hold large enough stakes to warrant information sharing and financial disclosure rights.
The attributes enjoyed by public market investors typically come with trade-offs. Most public market investors are not seeking the same 10x, 20x, and 100x returns their venture capital counterparts pencil in. Venture capital investors however require 8, 10, 15 years to realize their investment with little optionality.
Enter liquid venture
Digital assets have disrupted this investment model. Today, liquid crypto-assets are able to produce stratospheric venture-like returns while maintaining liquidity enjoyed by public market investors. How? Liquid venture investing. With early stage liquidity, assets are freely tradable on a global scale. With blockchain-based businesses, most pertinent financial information can be harvested in real-time. This is the new investment paradigm.
Benefits of liquid venture
Liquidity: Liquid venture investors maintain liquidity throughout the investment lifecycle. While this is rarely the same volume as blue chip equities, it represents a significant improvement over the existing venture capital landscape.
Optionality: Technology themes change rapidly, investment styles must as well. A traditional investor might require a sale or an IPO to get liquidity, a troubled company might require months or years to salvage. As liquid venture investors, if an investment thesis changes or a company fails to live up to expectations we simply sell our stake and move on with little bother and near-zero cost, we retain the ability to change our minds.
Information: Real-time data is a key benefit of on-chain businesses. While mapping and harvesting this data can be challenging, we are able to drive actions utilizing real-time data not stale months old financials. Informational advantage can also drive a substantial edge in these markets.
About Florin Digital
Florin Digital is a crypto-asset investment firm deploying at the intersection of finance and technology.
We seek out early-stage opportunities in liquid markets which present an asymmetric risk-reward profile. Our thesis-driven, hands-on approach allows us to unlock significant latent value in the teams and protocols that we partner with.