5 Things Blockchain Investors Look When Funding a Startup

For blockchain entrepreneurs, getting funds is not an easy-going job. There is a growing prevalence of blockchain in today’s world. But still, it is not sufficient to push blockchain to the vanguard of investment. There are many startup organizations which are turning to fundings from outside so that they can get the money required to run their company.

In fact, there are various innovative ideas that need different funding mechanisms. If you look beyond the ICO, then you can easily find various Web 3.0 funding options that increase opportunities and will promote business diversity.

Photo by Hitesh Choudhary

As an early investor, you may find various entrepreneurs who strive to launch as they have a solid idea. They see Venture Capital Funding as the only way that can help them build their dream. This thinking is very limiting, and it restricts the scope of projects to only those people having $B+ scale potential.

Shifting Blockchain Funding Ecosystem | Data Driven Investor

Talking about potential, the idea of blockchain technology is something that is rising in the market. But not all ideas are great and worth anything. So, if you are a person who has a billion-dollar idea related to blockchain, then this is how you can get your funding. And if you are a person who just wants tips that will help you in getting funding for your blockchain idea, keep reading.

Following are the things that blockchain investors look for before they decide to take a dive into the idea:

1. Real Innovation

You can consider blockchain as an innovation, but it is not good enough for investors who are looking for real innovation from an organization. Real innovation is something that can be considered as something different and fresh that a company has come up with by using prevailing or new upcoming technology. Blockchain is a technology which is very fast and it can add to the modernization of our businesses and our economy.

According to this statement, it may seem that investors may be the one without suitable projects to finance in. If entrepreneurs can focus more on growing their blockchain businesses, then it will be simpler for them to attract new investors who are looking for something new coming out of blockchain technology. So, think out of the box and do not just use an idea that someone else has already grown an empire on. Investors will not entertain such ideas.

2. Connectivity with Technology

Investors are always curious about seeing how blockchain can be used in association with other technology. This is the reason why investors are not interested in using blockchain in isolation. There are various benefits of converging blockchain and artificial intelligence together. It can benefit various sectors, including finance and healthcare. These two sectors see the most identity fraud cases in the past few years. Both these technologies have remained stand-alone technologies in the last decade, and many academics are trying to connect the two.

If blockchain and AI get combined together, then companies in these sectors can form an encrypted system, of storing sensitive data which can be unlocked using the knowledge and sophistication of AI. This is just one example of the way blockchain can be practiced. What you need to do is ensure that your idea has a good combination.

3. Useful Solutions

Many companies use “Blockchain” as a buzzword to attract investors to seek suitable investments. This is the reason why investors try to avoid them. These investors are interested in startups that can suggest blockchain solutions that common public can also adapt and accept.

The investors are continuously looking for something with the core value that comes from a set of functions inherited from blockchain and unable to be achieved in blockchain’s absence.

4. Valuable data

Investors look for valuable data in startups. Valuable data can lead to various precious and valuable discoveries and also helps to create projections and forecasts for various products. Any investor will be interested in investing money when the product is fresh in the market and its forecast is positive. Most of the time, investors want to have a clear vision. Also, they need a balanced skill set and an ability to get things done in the correct way.

5. Attentive Founders

Investors are attracted to startups which are very much adaptive to their businesses based on current situations and are attentive to industry happenings. Being updated with whatever is happening in the industry ensures investors that the founders themselves are very much interested in blockchain and is thus motivated to improve the sector. You should know how to adapt to remain sustainable and profitable is very important in running a business in the digital field.

Conclusion

If you want to secure funding from your investors, then, just using the word “blockchain” in your business is not enough. You can have a better chance of getting your company funded if you can integrate all the factors affecting the decision-making process of your investors.

https://medium.com/media/0707f5c806284d01a4a13c7b13a91ce3/href


5 Things Blockchain Investors Look When Funding a Startup was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.