I can’t help but apply startup investment learnings onto the landscape of crypto-currency investments.
Any startup investor will tell you very few startups make it to success. The path to success looks something like this:
- Build a team, experiment with an idea, build a prototype, try and show there’s a market need.
- Seed round to try and get some semblance of traction.
- Get series A funding ($2-15m) to improve your product as you have shown there’s real potential
- Get Series B funding ($7m+) to mature your product beyond developmental
- Get Series C, D, E…. you’re in fast growth now, it’s time to scale, scale, scale
- IPO onto the public markets, be a house-hold name.
Now here’s the approximate survival rates:
- pre seed 1-2%
- seed funded 2-5%
- series A funded 10-20%
This should be sobering to alt-coin investors. But the story gets worse…One Comment
Do you like my canvas art? I’m calling it “shit runs downhill“. I’m thinking about mounting it on my wall to remind me of the perils of HODLing alt-coins. After finding out that alt-coin index funds don’t really work, I put together a data visualisation of alt-coin price performance as further research into why.14 Comments
This year, the idea of managed portfolios and index fund portfolios has been on the rise, you can bet on many hitting the market in 2017. It’s a popular idea borrowed from Wall Street. For stocks 99% of index funds, namely a fund that buys the entire market passively, outperform actively managed funds.
Sounds like a great idea for crypto-land right?
I’ve been running simulations in the alt-coin markets to see if this is true. If so it would be prudent to diversify across many alt-coins as a higher performance investment over Bitcoin.
The results are surprising.14 Comments