Maybe Old-Fashioned Venture Capital Wasn't So Bad After All

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Maybe Old-Fashioned Venture Capital Wasn't So Bad After All
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Azeem Khan is a co-founder of Morph, an Ethereum layer 2, and consultant to the UNICEF Crypto Fund.

As the founder of a layer-2 blockchain focused on consumer crypto – meaning user-friendly applications that can achieve mass adoption – I’ve spent a lot of time thinking about why it’s more popular to talk about consumer crypto than invest in it. It’s a common complaint among builders that infrastructure not only gets all the love, but

If you were to ask anyone who understands venture capital or asked your favorite search engine how it works you’d likely see about the same response: private equity financing in which investors provide money to startups, take equity and traditionally look to see returns over 10 years. To date, that is mostly how venture capital has worked.

Before the introduction of token launches, venture capitalists used to invest in businesses where they received equity only – think Meta, Airbnb, Roblox and so on. The way to make the money back on their investment was either having another company acquire the startup they invested in or having the company do an initial public offering on the stock market. This is part of the reason it took so long for venture capitalists to see returns on their investments.

The two main things to look at are the “lockup” period, which is how many months after the token launch an investor must wait before they start vesting their tokens, as well as the length of that vesting period .

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