Disclaimer : This article is not meant as financial advice. Use it to supplement your own thoughts and research.
I'm going to give my current ico market research results and what to expect in the next few months.
Death will be inevitable for most projects if they don't dip the hand of partnering with venture capitalist into the ground.
Before going on to the insights, let me explain what venture capital is:
Source : https://www.investopedia.com/terms/v/venturecapital.asp
Let's continue.......
Recently, alot of undeveloped projects that are still in pre-launch stage partner with different venture capitalist.
Are they not putting poison into their own food?
I hope you can answer that later...... 😂
Here are some questions for you :
How do venture capitalist's benefit from partnership with a project??
Here comes a question that has been asked times without number but couldn't get a correct answer. I hope you know venture capitalist are crypto magnates and rich traders/investors. I hope you know, No rich man wants to be poor after enjoying some riches instead they look for ways to increase their wealth. This is one of the reasons why they set a private capital and invested in pre-launch projects.
They benefits hugely from this by making an agreement or deal with the project developers which usually results in getting a special and huge percentages for investing in them. From my research, I noticed that a large number of vc's demand for a high percentage /shares of the project tokens which usually kill a project in the long run.
😂....... This is how a project start to test the gun which is going to be use to kill itself..... ✌
Here comes the second question :
When do VC's sell this tokens they have bought and collected a high percentage on??
Lol....... If you check most projects white paper, and you checked beneath the circulating supply section, you will see a sentence there 'All private sales tokens will be locked up for some months' usually minimum of 2years. I believe you should be laughing now, Let me ask you this question :
if you are a venture capitalist, will you place an investment in a project for 2 years without getting your capitals back or profits?
This is hell 'NO'
And recently some findings reveal that most projects doesn't survive after 6-10months of launching in market.
Their value decreases as a result of the birth of a new project that has the same mission and goal with them, whereas competition arises.
Now let move on to the game played by the venture capitalist's:
This is the segment where the question above will be answered.
The game goes thus :
They have an agreement with the Dev Team.
They go into partnership
They invested in the project.
Before going on, Why did most ico's write in their white paper that all private sale will be locked?
Because they knew if they didn't put that, no investors will invest in them because they believe their logic will be notified easily by investors. And this is a game played by the dev team and venture capitals.
Now let's continue, Venture capitalist sell their own shares in two seasons :
First season : This is when the token just launched on a big exchange and it's price is slightly above the price they bought. So as to get their investment fund back and a little gain.
Second season : This is when the products hyping begins, remember their investment fund and a little gain is out of the market already and what is left for them is the main huge profits. This time the project lead team hype the products launch and this makes the tokens price to increase easily. Whereas a large number of people usually fall for this trap and game played.
Conclusion : Now the ventures capitals fund is out of the market, this makes a token price to dump hard, this is when the project tokens price hit all traders stop loss and enter into the red blood ocean. Note, the higher the number of venture capitalist in a project, the faster the death comes.
Now the project death is inevitable, this is how the strategy of the entry and exit work for ventures capitalists.
Thanks for Reading
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