kaal:claim:3962614-003

Lack of liquidity is one of the biggest problems in the traditional venture capital ecosystem, and the traditional VC model disincentivizes generating early profits because capital is locked in for an extended period of time.

Source quote, verbatim

One of the biggest problems in the traditional VC ecosystem is lack of liquidity.4 The traditional VC model disincentivizes generating early profits.5 Capital is "locked in" or "locked up" for an extended period of time.

From

Wulf A. Kaal, REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu (2021), II.1.a) Liquidity - Capital Calls and Raising Capital, p. 5
https://ssrn.com/abstract=3962614 · source PDF

Cite as

Wulf A. Kaal, REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu (2021). SSRN: https://ssrn.com/abstract=3962614

Holds when

traditional fiat venture capital funds

Classification

failuresupport: arguedfailure: Capital lock up illiquidityfamily: liquidity-and-market-structure-failuredefirisk-and-incentivesinnovation

Related claims

supports kaal:claim:3406323-005 ICOs changed the venture funding market because they provide investors liquidity far faster than the tradition...

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