Panxora Digital Ventures has launched its hybrid seed funding solution to revive the sluggish capital market for emerging Blockchain token projects. The companies’ hybrid model creates a two-stage fundraising process that bridges the gap between seed investors’ interests and token founders’ needs to produce better results.
Gavin Smith, CEO at Panxora, said:
“Our hybrid offering provides blockchain project founders and investors alike with a professional solution to the challenges they face. Investors see our hybrid methodology not only as a structure that will improve the performance of projects but a low-cost way to get involved with promising projects early so they will be well-positioned to reap subsequent rewards. Using our hybrid approach, early-stage investors can spread their capital across more opportunities and have several different ways to generate an improved return.”
The recent downturn has produced lower returns on investment and a deteriorating risk/reward profile for Blockchain and cryptocurrency projects slowing down investors — who have become less willing to commit capital to new token projects.
Investor, who expect a clear vision of how they can make a return, often seek a significant equity slice in exchange for funding. While, at the same time, tighter legal frameworks and skyrocketing marketing costs are making token launches whether ICOs or IEOs far more expensive, increasing founders’ demand for financing.
Marcie Terman, COO at Panxora, stated:
“This type of investment structure while unknown in the cryptocurrency market is common in other alternative investment classes. This makes the hybrid investment structure not only attractive to token investors already committed to the industry, it opens the door to conventional investors who have been looking for their first or second foray into cryptocurrency, just waiting for the right deal to emerge.”
Panxora’s hybrid model resolves founders’ and investors’ demands by dividing the project funding in two and introducing investment diversification mechanisms to generate additional profit.
In the first phase, a special purpose company is formed to raise funds from accredited early-stage investors. Sixty per cent of this capital is used to finance the utility token launch where the project founders will raise the bulk of the money needed to fund the overall business project.
Thirty per cent of the capital is invested in a licensed large capital cryptocurrency hedge fund to create extra revenue streams to reward early investors for the risk they assume for their early participation.
Seed investors also receive utility tokens at private sale prices and a share in future revenue generated by the token project or in many cases an option to convert this to equity.
Panxora only offers this investment structure for projects where they are making an investment. They provide extra assurance that the project is managed in a fiscally responsible manner by ensuring that two-thirds of the funds raised during the token sale are placed in a ‘Governance Account’ held by an FCA regulated custodian KOINE.
The Governance Account funds are hedged against cryptocurrency price volatility using proven trading models and released to token founders on the achievement of specified milestones.
At the end of thirty months, the SPV is dissolved and payouts are made to seed investors including the profit and principal originally invested in the large capital cryptocurrency hedge fund. In some cases, an option to convert to an equity stake is also possible.
Panxora Digital Ventures, part of the Panxora Group enterprise provides services that professionalise and elevate the crypto ecosystem. Its offerings are built on the back of the team’s experience in technology, blockchain and traditional finance.
Its treasury risk management technology and investment proposition offer much-needed support for token projects looking for professional methods to raise funds and manage capital. It also has a hedge fund which trades the crypto markets using proprietary AI-software open to high net worth, professional and institutional investors. Its cryptocurrency exchange provides liquidity for token projects, and its accounting and payments software for crypto simplifies and automates the tracking and clearing of crypto transactions.
From its offices around the world, Panxora is ensuring that crypto-asset holders and token founders have the tools they need to build dynamic, professional and profitable businesses.