# kaal:claim:3962614-003

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- traditional fiat venture capital funds

**Source quote.**

> 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, page 5

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

**Verify.** sha256 of source PDF `c6e202e77fd08db801f932774026458b94e5d103abf30cb1189fe6a1c5edf391` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202021%20-%20REPUTATION%20AS%20CAPITAL%20%E2%80%93%20How%20Decentralized%20Autonomous%20Organizations%20Address%20Shortcomings%20in%20the%20Ventu.pdf

**Failure mode.** Capital lock up illiquidity  (family: liquidity-and-market-structure-failure)

**Topics.** defi, risk-and-incentives, innovation

**Keywords.** liquidity, lock-up, short-termism, venture-capital

**Related claims.**

- supports: https://wulfkaal.github.io/claims/3406323-005

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.