About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

16 Berkeley Bus. L.J. 533 (2019)
Venture Capital in the Rise of Crypto Economy: Problems and Prospects

handle is hein.journals/berkbusj16 and id is 539 raw text is: Venture Capital in the Rise of Crypto Economy: Problems and Prospects Dr. Lin Lin* and Dominika Nestarcova ABSTRACT The rise of the crypto economy brings promises and perils to the venture capital industry. Distributed ledger technologies offer new investment opportunities to venture capitalists (VCs). Traditional VCs are gradually diversifying their portfolios to invest in crypto-assets and blockchain technology projects, as well as launching crypto-centric funds. Simultaneously, venture capital funds are developing various hybrid financing models to adopt and imitate the fundraising mechanism of initial coin offerings. However, the polymorphous and evolving features of crypto-assets also introduce new risks to the venture capital market. The paper therefore examines the emerging models in the venture capital crypto landscape, identifies the new risks of the crypto economy, and examines the current regulatory and contractual solutions. The paper also proposes recommendations for the venture capital crypto landscape going forward, including heightened regulations on crypto-centric funds and fund managers. A b str a ct ................................................................................................... 5 3 3 In tro d u ctio n ............................................................................................. 5 3 4 I. The competitive interaction between venture capital and ICO model. 539 II. Emerging hybrid models and problems .............................................. 544 A . Launching a crypto fund ...................................................... 545 1. A new ly-raised crypto-fund ........................................... 545 2. Change in fund's strategy to crypto ............................... 547 B . Tokenized venture fund ....................................................... 548 C . R ev erse IC O s ....................................................................... 550 D. Investment in other crypto funds (fund of funds structure). 552 E . O ther hybrid m odels ............................................................ 553 * Lin Lin is an Assistant Professor at the Faculty of Law of the National University of Singapore. Dominika is an associate with the Spartan Group. The authors thank the interviewees (venture capitalists and practitioners in the crypto sector based in Singapore, China, and the EU), who generously shared their knowledge and insights with us. Interviews were conducted on an anonymous, background basis. This research was generously supported by the Centre for Banking & Finance Law at the Faculty of Law, National University of Singapore. We thank Elson Ong, Walter Wan, Zhu Jinwen and participants of the Financial Law Amity Symposium for valuable comments. The views expressed in this article are those of the authors and do not necessarily represent or reflect the views of NUS or Spartan Group. All errors remain our own.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most