There are often fund-level restrictions that prevent LP investors from trading their positions and VCs have historically not gone out of their way to facilitate trade for their LPs. Blockchain Capital has demonstrated that this model can be disrupted. They executed a portion of the fundraising for their recent VC fund by issuing a blockchain token (BCAP). In doing so, the fund receives the capital they need to invest in illiquid securities, yet investors can exit prior to 10 years selling the token to another investor. Importantly, this liquidity does not require a redemption on the part of the fund. Furthermore, since tokens are highly divisible, it eliminates the need for minimum investments. Blockchain facilitates trade in the secondary market.
Traditional Asset Tokenization
Stephen McKeon
2.4K28

Why can’t LP’s sell their current “equity” in a VC fund to other LP’s?

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