Blockchain provides a fantastic way to increase efficiency of book-keeping for online transactions. However, traditional PoW model of Bitcoin blockchain has inevitable constraints in terms of transaction speed, not to mention the severe waste of energy.
On the other hand, Stellar Consensus Protocol offers transaction efficiency comparable to traditional internet transactions yet lowering the fee by distributing the book keeping labor. Therefore, it makes sense to transfer traditional financial products, such as a closed end Venture Capital fund bundled with highly curated venture invested startup companies, onto Stellar network.
Transferring once hard to access financial products typically only reserved for the very wealthy onto Stellar network enables the following benefits:
It increases its accessibility for the broader population. A set of highly selective venture backed companies can carve out equity and put it inside a SPV for investment by the general public. Once reserved only for Silicon Valley investors, these companies are now investible by everyday people. Since a diverse selection of companies are bundled in an SPV, the risk is lowered by general portfolio diversification theory.
It minimizes the book keeping cost of the issuer. In the traditional world, there is an army of fund administration personnel who keep administrative fees high. Steller Network can do this for a lot less.
It shares the ability to be traded in a decentralized exchange platform. The build in order book of Stellar allows these companies to get continuous valuation. Every company can mark to market their value in real time. This completely changes venture investing where valuation is often opaque.
Through Stellar’s built-in token issuing mechanism and thorough our KYC/AML process, we can restrict the holder of the product and therefore avoid illegal activities around it.
Traditionally, equity of an early stage company is only available for investment by Silicon Valley VCs and angel investors. Why can’t the rest of the world participate? Everyone should be able to invest in early stage companies if they want to. However venture investing is risky and the general public may not be able to accurately evaluate a startup. But we should give everyone this chance.
We at Caldera Capital believe that everyone should have an opportunity to invest in next Facebook, Uber or DJI. Even better for investors is if we can bundle such three companies into ONE token on the Stellar Network. Moreover, by introducing such an asset class, the Stellar network can truly differentiate from many other asset issuing blockchain platforms and hence boosting Stellar’s popularity.
Now there are two ways to effectively mitigate the risky nature of venture capital investing:
Having a restrictive company selection procedure.
Investing in a group of highly selective companies instead of just a few.
The product presented today by Caldera capital makes use of both mechanisms above. We will issue an asset token on Stellar network that represents the equity in 20 highly selective start-up companies. These companies are all admitted to a class in the 500 Startups’ accelerator program, a renowned Silicon Valley accelerator. These startups also cover a broad range of industries such as biotechnology, Fintech, artificial intelligence, automated bots, VR, and blockchain. These companies are selected from an applicant pool of 2000 companies, a selection rate of about 1% (much much harder than to get into any Ivy League college).
Please post your questions about us below and we are more than willing to respond.
