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The Rise of the ICO, and What It Could Mean for Venture Capital

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For any ambitious startup founder, the traditional route to funding goes through angel/seed investors and then eventually to the big venture capitalists.

The sophisticated players in this funding landscape make significant amounts of dough by spotting game-changing opportunities in their early stages, and then applying their insights, connections, and experience to these startups to make them financially viable. Finally, they guide the successful company to an exit, take their returns, and then distribute to the partners.

But what if startups, especially those related to the blockchain, were able to raise money from everyone simultaneously? What if the traditional gatekeepers didn’t matter as much?

ICOs vs. Venture

Last year, it became clear that Initial Coin Offerings (ICOs) would start to challenge traditional venture capital, as funding raised through them exploded by over 20x.

Today’s infographic from Vanbex Ventures shows key statistics around this phenomenon, as well as the evolving reception from venture capital and institutional investors.

The Rise of the ICO, and What It Could Mean for Venture Capital

Needless to say, the relationship between ICOs and venture capital is a conflicted one.

On one hand, it represents the inevitable disruption of many different elements of the traditional business model. On the other hand, the ICO space is too tantalizing to ignore: cryptocurrencies are worth nearly $0.5 trillion, and those that put money in early saw returns in the quadruple digits.

Getting Onboard?

The $5.3 billion boom in ICOs in 2017 had no problems surpassing traditional early-stage venture capital for blockchain-adjacent startups, which only saw $0.95 billion in funding.

While most VCs were slow to adapt, there have been increasing signs of interest – even despite the existing regulatory concerns. In particular, the idea of additional liquidity appeals to these investors since tokens can be sold at any point. This gives an advantage over traditional models, where a liquidity event such as an IPO or acquisition is necessary.

As a result, some VCs are shifting how they work with blockchain startups. They will pre-acquire tokens prior to a public ICO, and even consult with startups to help them maximize the value of tokens and the underlying technology.

Going Institutional

The crypto asset class is also becoming more ubiquitous among institutional investors as well.

There’s such an institutional appetite to get exposure to this. It’s a half-a-trillion-dollar asset class that nobody owns. That’s a pretty wild circumstance.

– Dan Morehead, CEO and CIO of Pantera Capital

In fact, 17% of global hedge fund managers say they currently (or plan to) invest in cryptocurrency. At the same time, over 100 crypto hedge funds have popped up over the years – another sign of a widening and market landscape.

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Charted: The Jobs Most Impacted by AI

We visualized the results of an analysis by the World Economic Forum, which uncovered the jobs most impacted by AI.

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Charted: The Jobs Most Impacted by AI

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Large language models (LLMs) and other generative AI tools haven’t been around for very long, but they’re expected to have far-reaching impacts on the way people do their jobs. With this in mind, researchers have already begun studying the potential impacts of this transformative technology.

In this graphic, we’ve visualized the results of a World Economic Forum report, which estimated how different job departments will be exposed to AI disruption.

Data and Methodology

To identify the job departments most impacted by AI, researchers assessed over 19,000 occupational tasks (e.g. reading documents) to determine if they relied on language. If a task was deemed language-based, it was then determined how much human involvement was needed to complete that task.

With this analysis, researchers were then able to estimate how AI would impact different occupational groups.

DepartmentLarge impact (%)Small impact (%)No impact (%)
IT73261
Finance70219
Customer Sales671617
Operations651817
HR57412
Marketing56413
Legal46504
Supply Chain431839

In our graphic, large impact refers to tasks that will be fully automated or significantly altered by AI technologies. Small impact refers to tasks that have a lesser potential for disruption.

Where AI will make the biggest impact

Jobs in information technology (IT) and finance have the highest share of tasks expected to be largely impacted by AI.

Within IT, tasks that are expected to be automated include software quality assurance and customer support. On the finance side, researchers believe that AI could be significantly useful for bookkeeping, accounting, and auditing.

Still interested in AI? Check out this graphic which ranked the most commonly used AI tools in 2023.

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