MOVE Capital: A New Paradigm for Venture Capital
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From the world of crypto new paradigms for finance and economics are emerging. DeFi is rising, and with it, the development of new solutions to the troubles that our rotten financial system has trapped us into are also starting to surface.
The NEARverse has given us an incredible amount of innovative projects that are contributing to the development of DeFi and the creator economy, such as Ref finance, the Rainbow Bridge and Mintbase, just to name a few. And with Move Capital, NEAR has also birthed a new paradigm for venture capital.
Why is Mainstream Venture Capital Innovation Averse?
Venture capital originates from the structural cracks left open by the rules of capital markets that make it extremely difficult for incumbents to get access to the funding required to launch their business. Venture capitalists exploit this structural inefficiency by bringing equity capital of securities convertible into shares in unlisted companies with high development potential. VCs’ job is to identify and bet into new businesses, boost their growth and achieve a high capital gain on disposal.
From this description, one would expect VCs to be start-up and innovation alleys but this could not be further from the truth. As VC expert Diane Mulcahy points out in a Harvard Business Review article, only a tiny percentage of VC’s investments goes to startups. Most of the capital invested by VCs goes to projects that already see great expenditures of governments and corporations. So, contrary to the popular myth promoted by VC firms, VC plays only a marginal role in funding basic innovation and this is greatly reflected in the way the industry itself runs:
“It’s ironic that VC firms position themselves as supporters, financers, and even instigators of innovation, yet the industry itself has been devoid of innovation for the past 20 years. Venture capital has seen plenty of changes over time — more funds, more money, bigger funds, declining returns — but funds are structured, capital is raised, and partners are paid just as they were two decades ago”. -Diane Mulchany
Today, venture capital is becoming one of the most important forms of business financing. In the U.S. — where the phenomenon was born 40 years ago — the value of venture capital-backed companies amounts to about 20% of total market capitalization (Standford Graduate School of Business). But the rise of this trend is hardly good news for startups and new entrepreneurs if the industry keeps being risk-averse and pouring its resources where they are least needed. A new VC model is needed to foster a healthy economic environment, a model that truly fills up the voids left open by institutions instead of exasperating them.
Following the traditional finance’s incentives, VC firms are only contributing to tightening the noose on new entrepreneurs trying to materialise their ideas, making the market ever more defective. It is time we stop thinking that flowers grow out of shit and look for alternatives if we want to stop getting wrecked by the system. The landscape looks grim for the new generations of entrepreneurs and there is no reason to believe that traditional institutions are going to fix that. It is time no time to reform, it is time to look for the sparks of hope emerging from the parallel world of crypto and set the damn house on fire.
MOVE Capital: An Innovation Ally
A new paradigm for VC is emerging in the NEAR ecosystem in the form of a project development fund called MOVE Capital. The aim of Move Capital is to help the emergence of the new generations of Dapps that are going to lay the foundations of the Open Economy in the NEAR ecosystem.
“MOVE Capital pioneers a new model for helping early ecosystem projects launch on NEAR Protocol. As the NEAR Ecosystem continues to grow at record speed, we look forward to supporting the future direction and development of MOVE Capital.. With a host of new projects building on NEAR, Fabric will be actively involved through MOVE Capital in stewarding the next generation of Dapps and backing founders building the Open Economy.” — Richard Muirhead (4NTS)
MOVE Capital offers entrepreneurs an opportunity to get access to the necessary funding to realise their projects as well as the guidance needed in order to succeed in their endeavours. What distinguishes its approach from the mainstream VC is that Move Capital’s work focuses on the long term future of the projects, mentorship, and accessibility. Crucially, it helps new entrepreneurs to navigate the world of crypto, get embedded in the ecosystem and widening their perspectives by putting them in touch with other VCs and opportunities.
The work of MOVE Capital is focused on forming the next generation of crypto entrepreneurs and putting in place a collaborative mechanism that breeds healthy competition and puts innovation over fast and high financial returns.
“Beyond equipping the next-generation of crypto-entrepreneurs on NEAR, MOVE Capital is focused on pioneering new collaborative mechanisms, positive feedback loops, and ongoing network effects for NEAR protocol as a whole. In short, Move Capital intends to create a sustainable and replicable process for new projects to not only get funded, but to also position themselves to receive long-term support from across the NEAR ecosystem”. (4NTS)
MOVE Capital’s model is radically different from the traditional VC’s one as it keeps an eye on the long term future of the companies it invests in, and accompanies them through their various stages of development. For MOVE Capital, VC is not only a matter of pouring money on a safe project to reap the benefits of fast high return; investment means building a healthy economic environment from which everyone can benefit.
Building a New Model for Venture Capital
Guidance, long term support, and low entry barriers are what new entrepreneurs desperately need these days in order to bring forward bold innovative projects and products. And by the same token, this is what society needs in order to advance economically and socially. We need a healthier economic infrastructure that is more accessible, fair, and that promotes healthy incentives.
In the current climate, there are very few opportunities for entrepreneurs to get access to the resources they need and this is becoming increasingly problematic as inequality and economic stagnation grow. Traditional VCs are interested in gaining big on safe highly sponsored projects thus hindering innovation and diversification.
Luckily from the world of crypto there are initiatives like MOVE Capital that help to counter this state of affairs. However, one project can only go so far without a network of like-minded souls that support it and help it grow. There are still hopes to build a better future but we cannot wait much longer as the more we procrastinate the longer it will take to get out from the deep mud we put ourselves in by supporting for years a deficient financial system that only benefits a small percentage of the population. It is now the right time to explore new alternatives and start building a new world one step at a time.
If you would like to get involved with MOVE Capital, co-invest, donate or discuss new projects you can get in touch through rb@move.capital. If you are an entrepreneur and would like to submit a project you can directly complete the preliminary form, or contact one of the founders of MOVE Capital. Don’t be afraid to get involved, there is literally all to gain and nothing to lose from opening up to new ways of doing business.
