How to raise a Seed Round from the Future of Blockchain Competition
If you don’t know already, the Future of Blockchain competition runs for 3 months (Dec to March) for university participants to build something amazing involving blockchain. You can either build your own idea or answer one of 8 challenges. The top prize for all participants is £20k cash and for each of the 8 partner challenges there’s up to three £2,000 cash prizes available (so 24 in totla)
Away from the cash prizes, we at StakeZero (an early stage blockchain VC) want to invest in a project (or projects, plural) that emerge from the competition. Note that all the shortlisted finalists will get a chance to pitch in front of a panel of leading traditional VCs from our network too. Note also that you can be considered for investment whether you are building your own idea or answering a challenge.
Disclaimer: these are tips for raising investment, not winning a cash prize! Investment is separate to the cash prizes. Click here for tips on winning a cash prize.
If you’re looking to leverage the competition to raise an investment round, here are some tips and what we are looking for:
1. A talented team
Ideally, a team should have more than 1 person and no more than 6. We don’t mind what number in between but the team should at least 3 of:
- Technical knowledge, meaning who can build your project within your team without needing to outsource any components.
- Business focus, meaning someone who can understand product-market fit, how to market, how to get traction.
- Operational capacity, meaning someone who can be trusted to get the less glamorous (but necessary) tasks done quickly.
- Commitment, meaning you have an overriding desire to execute your project and you allocate 100% of your working capacity to it (necessity)
You might be a talented individual or duo who have all the above already. However, you should ask yourself whether it is realistic that you can focus on all of the above. ‘Focus’ here means allocating sufficient time to execute it properly. It also means prioritising what you are good at: if you can code twice as fast as you can do operations, it might best if you devolved the operational workload onto someone else.
We also want to see validation of how talented you are.
If you are technical, this probably means a strong university degree in a science, maths or computing subject at a great university or developer experience at a successful startup or company.
If you are business focused, you probably need to have worked for several years at a successful startup or company or had your own successful startup/company.
If you are operational, you probably need to be smart (again, good university degree), young (meaning you’re prepared to do less glamorous tasks) or had experience for several years at successful startup/company doing operations.
Commitment-wise, there are a few basics: 1) This takes up 100% of your working time (or at least, if it doesn’t, there’s a good reason why). 2) Your working time is 60 hours + a week (probably meaning you have few personal commitments such as a family), 3) Your earnings and wealth are tied to this startup, at least in the short-term.
2. A ‘real-world’ idea
As investors, our issue with the crypto space at the moment is that there is a lot of great tech but no actual use cases. If you are looking for funding, you’ll need to not only be able to execute the tech, but also prove that the tech is relevant. ‘Relevant’ here simply means: it has monetisable use. This does not mean you have to build something someone will pay for, it just means you are building something which, somewhere down the line, there is a clear way it could generate money.
So, if you’re looking for a heuristic here: find a problem that only the use of blockchain technology can solve. While we’d love to see some cool tech built for its own sake, shoe-horning it into a problem that either doesn’t exist or that you don’t truly understand will likely mean your project is not viable.
Think of it this way: you have a choice of two challenges you could engage with:
Challenge A: There’s a door to a room. It has a keyhole but no one can find the key. Behind the door to the room is a lot of money. Your task is to design a key to open the door and your prize is all the money behind it.
Challenge B: You’ve already designed what you think is the coolest key in the world. Your task is to find a door somewhere in the world or the future that this key can open (if it opens any door). Your prize is whatever is behind the hypothetical door (or doors) this key opens.
Which would you choose?
3. Traction
A startup pitch is a claim or a theory. You think that your startup will make money/accrue value because of x. To raise money, you have to convince your investor of x. The best way to do this is traction. Traction can take one of many forms, here are the main three:
a) revenue (strongest)
b) users (strong — assuming they are active and sticky)
c) research (weak — for two reasons: 1. you can easily bias research through the way it's designed and 2. giving your opinion is much easier than committing time or money to something).
As a key caveat, with all of these the size of the traction is less important compared to whether it is scalable or not. This means that the reason why you have had traction at a small scale or at the start is the same reason you’ll have traction at a large stage or when you are more mature.
A note on how funding would work
You’ll need to:
A. Apply for the competition before applications close on Sunday 9th December at 23.59pm.
B. Be selected to compete.
C. Build your project and submit it by Sunday 10th March.
D. We’ll invite you to pitch at the finale in late March.
E. Whether or not you win a cash prize, we’ll approach you if we think we want to invest. If you are raising a round before March, let us know in case we can help/give you feedback. We’ll also try and bring a few investor friends onboard to join the round.
The size of our investment can vary — it could be as small as £50k or as large as £500k. We expect that anything we do invest would be around the £100k-£200k mark.
Any questions, email anthony@stakezero.com
