Why Morgan Creek Digital led the Seed round in CityBlock Capital
As digital natives grow up and earn more disposable income, they will begin to invest in traditional asset classes. Unfortunately, the incumbent financial organizations offer outdated products that this generation finds unattractive.
Venture capital is a great example of the disconnect. Most funds require individuals to fill out physical paperwork, offer limited transparency & information, provide near zero access to GPs, optimize for well-connected US investors, and require multi-year lock-ups.
It would be unfair to say that venture capital is “broken,” but we believe that there is room for improvement. There is an opportunity to build a global venture capital firm from scratch for the Digital Age.
This is why we led the Seed round for CityBlock Capital.
CityBlock Capital is building a venture capital firm that is attractive to digital natives, optimizes for global participation, and gives investors more optionality. Here are a few nuances to their model:
— The firm raises capital on a city-by-city basis. They select local investing partners who have strong networks, deep operating experience, and access to valuable, local dealflow. These operating partners are able to complete the “last mile” of venture capital investing — finding the best deals earlier than anyone else by having constant boots on the ground.
— The firm will accept domestic and international investors, while also allowing investors to contribute funds in fiat or digital currencies. These investors don’t have to “know a guy” or fill out paperwork. They simply can go to the CityBlock Capital website, verify their identity & legal compliance, and contribute funds. We live in a global world, so it is time we start making it easier for all investors, regardless of geography, to participate in venture capital opportunities.
— The firm will tokenize each fund that they raise. This allows investors to avoid the multi-year lock-ups of traditional funds, while also gaining greater levels of liquidity. It is time we start giving the power of choice and freedom back to investors.
— The firm will provide investors with greater levels of transparency and access. The days of giving someone your money and only hearing from them quarterly are gone. People have increasing access to information in almost every aspect of their life. Now they will have it in their venture capital investments too.
— The firm is launching their first fund in New York City. Investors can buy the NYCQ token, which represents a legal LP share in the fund, and gain many of the advantages of the CityBlock model. The fund will be deployed by a great group of local investors who have significant venture capital experience.
CityBlock Capital is not a white paper of dreams, but rather an operating company with a product ready to launch. We are excited to be an investor and strategic partner as they work to build the first venture capital fund for the Digital Age.
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