Using the blockchain, Venture Exchange VNX has created an exchange platform to link investors and venture capitalists in search of liquidity. Very well received in the market, this solution must wait for the approval of the CSSF (Luxembourg Commission de Surveillance du Secteur Financier), where in the world of finance, these are traditional methods for obtaining cash.
Venture Exchange VNX, a young Fintech based at Lhoft (https://www.lhoft.com/), has chosen the second option to design a simple and secure way to attract investors to the very tight venture capital market. “The problem in VC industry is that investment in companies is long-term,” said Vladimir Khanumyan, Chairman Of The Board Of Directors,“the capital is blocked, and venture capitalists are still lacking liquidity.”
Founded in February 2018, Venture Exchange VNX has developed a digital platform based on the blockchain. This allows venture capital firms to “tokenize” investments to find investors, and therefore fresh money. In other words, they transform part of their investments into digital derivatives to sell them.
These “tokens” can then be traded on this platform, the same as stock trades. The owner of the token is entitled to receiving a portion of the future venture funds’ profits (exit proceeds) from selling off the fund’s portfolio investments.
“It’s not about selling shares of the company in which the venture capitalist has invested,” warns Alexander Tkachenko, CEO and founder of Venture Exchange VNX, “but to receive a share in the future profits of the venture fund being tokenized. And if we chose the blockchain, it is simply to benefit from the advantages of this technology which makes the whole process easier and more secure. “Be careful, it’s not about ICO, digital fundraisers that use the blockchain, because the purpose of the operation is not to directly finance a company in exchange for a future service, but rather, it is a process of securitizing part of the investment up to 50% of its total value.”
With competitors in the United States and Asia, Alexander Tkachenko knows what he is talking about. After a career with Japanese TDK in Luxembourg, he created his own venture capital company, 2be.lu Investments. “The venture capital companies I’ve met are interested in this type of platform. When they are presented with our solution, they ask me if they can invest in my start-up, “says Alexander Tkachenko. “But for now, we are primarily looking for partners to develop.”
The platform created by Venture Exchange VNX is already functional, however the start-up is waiting for a license from the CSSF to officially launch. Alexander Tkachenko and Vladimir Khanumyan are confident this will happen soon. “We know we have competitors in the US and Asia, but all are in the early stages of development,” adds the Venture Exchange VNX CEO.
Nevertheless, the start-up already employs 10 people in its offices in Lhoft in addition to a Russia-based IT team, that counts several winners of global blockchain hackathons.
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