The general problem generally associates blockchain technology with Bitcoin and other cryptocurrencies. However, the public ledger technology has other applications and this is why a consortium of Swiss investors are planning to establish a start-up factory for blockchain companies. Their ultimate goal is to gather $100 million to invest in these blockchain friendly companies.
The company is known as Genesis Hub incubator and is based out of Switzerland's Zug Valley which has a reputation for being known as the Crypto Valley. The company already has 20 blockchain start-ups on its list and is looking to expand at a rapid pace.
Backed by Crypto Valley Venture Capital (CVVC), Genesis Hub plans to set-up and fund 60 new start-ups each year. This is just the beginning as CVVC has plans to duplicate the incubator model into other parts of the world. The plan is for prospective start-ups to enter Genesis Hub program for three months. During this period, they will receive $125,000 in funding. They will operate out of the co-working space provided by Crypto Valley labs in Zug.
They will also be getting top-notch guidance from a team of experts in business and technology so as to refine their business concepts.
After the three month period, another round of funding can be negotiated depending on how well the start-ups perform. In exchange for this infusion of funds, the start-ups will give an eight percent stake of their business to CVVC.
A Replacement For ICOs
A lot of blockchain start-ups are resorting to initial coin offerings (ICOs) to bring in cash flow. This is where companies sell off crypto tokens to raise money for the company. The ICO model worked very well in 2017 but has tapered off this year as the crypto currency market took a hit. There are also other concerns surrounding ICOs.
ICOs are still unregulated and this has led to several failed start-ups that have cost investors millions of dollars. Mathias Ruch, one of the co-founders of CV VC is convinced that ICOs are going to get out of control and crash. He thinks that ICOs will merge with traditional initial public offerings (IPOs) to create a safer and more dependable way to finance start-ups.
In a statement, Vasiliy Suvorov, an advisor for CV VC said
ICOs will continue to be a useful mechanism but they will no longer be core to the blockchain economy. We have had all the hype about ICOs, and now we need a model that takes all these great technology ideas and brings them into the real economy
