Recap from OST LIVE with KR1 Co-Founder Keld van Schreven — Funding Early Stage Blockchain Projects
Keld van Schreven, Co-Founder of KR1, a digital assets investment firm, joined us on OST LIVE to discuss digital assets, investing in early stage decentralized and open source blockchain projects, and transforming from web2 to the emerging web3 infrastructure.
Keld has a history in co-founding several web startups since 1995, including TireTags, Dinary.com, and the SmartTrade App. He discovered Bitcoin in 2013, when it began to surge and gain some momentum shortly after the nation of Cyprus began discussing tapping deposits as part of the bailout by the EU and IMF. In 2016, Keld co-founded KR1, one of the first public companies to provide token investing on an exchange, allowing anyone to invest in KR1 shares.
Funding Blockchain Projects
Keld says there is a theme of projects that are now raising money privately as opposed to a public ICO or crowdsale. He says “it’s a great shame because the whole ethos of this decentralized movement is for the individual to be empowered and take control. Crowdsales should be like that.” Public ICO’s and crowdsales allow for retail investors to invest in blockchain projects whereas only accredited investors are able to invest in private sales. Keld believes “it’s important for these projects to keep the little guy as the number one guy.”
Keld believes that although it is now harder for companies to launch a successful ICO, “cream always rises to the top, good projects will get funding.” It just might take a bit longer and be a more difficult path than before. Keld suggests for current projects to commit fresh code, stay activite in repositories, communicate with their community, show effort, and provide value. When asked “Do you believe projects need at least a Minimal Viable Product (MVP) and a start on the project before raising any money?”, Keld said “You need more than that, even if you’ve got a stellar team and the tech is pretty cool, you’re going to need the unfair advantage.” An unfair advantage is a unique trait that sets a project apart such the technology, the project traction, or a potential root to a lot of usage.
Should projects hoping to ICO in 2018 or early 2019 continue as planned?
Keld says it depends on the interest from the community, adding “if you have a lot of inbound interest in your project with a community that’s large enough, then you probably have a chance of getting some funding through a crowdsale.” He believes a safe way to raise funding is to close 70–80% of the money with a couple of funds and then raise the rest with the community. A stand alone public crowdsale is at the risk of not receiving enough funding due to poor market conditions, but if projects have a large community, Keld says they can do the opposite and raise majority of the funds with a crowdsale. Keld mentions that most of the web2 startups were seeded under $1 million, adding that projects don’t need millions of dollars in funding because a lot can be done with $500k-750k.
What To Look For In Early Stage Blockchain Projects
Keld looks for projects that have a mission with individuals that understand how to achieve that mission in technical terms. He looks for projects that have a framework that demonstrates the process of getting from milestone A to milestone B and individuals that understand the obstacles involved and the resources needed. Keld says the common theme is the people behind the project and their track record of being an expert in a specific skill such as coding, finance, or gaming. Keld looks for individuals and teams that are able to figure out any obstacle that comes in their way. Keld describes these individuals as “talented people doing something different where the herd isn’t.”
Emerging Web3 Infrastructure
Keld describes Web2 as a legacy infrastructure of the old internet which is HTTP and Web3 as a new infrastructure with a focus on decentralization and trustless systems. He points out the irony in the web initially being a decentralized network, but being taken over by centralized platforms with vulnerabilities and a high demand for end user information. Keld mentions that the new web3 infrastructure will solve the privacy issues in web2, such as the Equifax hack, and will be more pro individual. Keld believes Web3 is going to get rid of the overhead associated with central authorities in web2. He adds on to say that we’re “going to see really exciting new services come out which have not been possible before.”
Coming Up Next on OST LIVE: Jehan Chu
Be sure to join us next week for our OST LIVE with Jehan Chu, Co-Founder and Managing Partner at Kenetic Capital, a blockchain firm focused on expanding the development and adoption of blockchain platforms through investments, advisory services, community and technology. Subscribe to our YouTube channel or listen to the audio format on anywhere you listen to podcasts, including on iTunes, TuneIn, and Spotify. We’re also now available on Alexa! Simply add “OST LIVE” to your flash briefing.
About OST
OST blockchain infrastructure empowers new economies for mainstream businesses and emerging DApps. OST leads development of the OpenST Protocol, a framework for tokenizing businesses. In September 2018 OST introduced the OpenST Mosaic Protocol for running meta-blockchains to scale Ethereum applications to billions of users. OST KIT is a full-stack suite of developer tools, APIs and SDKs for managing blockchain economies. OST Partners reach more than 200 million end-users. OST has offices in Berlin, New York, Hong Kong, and Pune. OST is backed by leading institutional equity investors including Tencent, Greycroft, Vectr Ventures, 500 Startups.
