Innovations in Fundraising and Capital Deployment Through Tokenized VC Models
DOI:
https://doi.org/10.63282/3050-9416.IJAIBDCMS-V5I1P108Keywords:
Tokenized Venture Capital, Blockchain, Smart Contracts, Capital Deployment, Security Tokens, Liquidity, Tokenization, Secondary MarketsAbstract
The landscape of venture capital is undergoing a profound transformation through the advent of tokenized Venture Capital (VC) models, which leverage blockchain technology to innovate fundraising and capital deployment processes. As a result of new decentralized and programmable frameworks, models with high entry fees, a lack of liquidity, and limited places are being challenged. Thanks to tokenization, investors can own a part of a company directly through digital tokens and trade these tokens on the secondary market, making it easier for investors worldwide, even retail investors, to take part. This paper looks at the architecture of tokenized VC platforms, stressing the importance of smart contracts for automating decision-making in capital allocation, governance, and following compliance rules. This section also explains Initial Coin Offerings (ICOs), Security Token Offerings (STOs), and Decentralized Autonomous Initial Coin Offerings (DAOICOs, in addition to looking at community-based funding options and various liquidity systems. Another topic addressed is using automated and results-based tranching in addition to governance through blockchain. The example of Monad’s Layer-1 blockchain fundraising displays how the process is put into practice. In addition, the report discusses problems such as rules, security risks, and shifts in the market, and suggests that integrating AI, offering cross-border fund management options, and increasing interoperability could open many doors forward. When rigor from institutions is fused with decentralized flexibility, tokenized VC can become accessible to more people and change the global market for capital
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