About Hatchworks 

Hatchworks is a venture firm with an in-house incubator. The company thoroughly vets, invests in and monitors its portfolio investments through an Investment Committee (IC) and Operations Committee (OC). Hatchnet, which is its proprietary algorithmic investment insight platform is now open to all HATCHTOKEN holders, giving early access and insight on industry leading VC deals that have eluded the masses for decades. While VCs keep the best deals to themselves, share, through upcoming series of Hatchfunds.

Hatchworks is no secret that by the time companies like Uber or Beyond Meat come to
market, they have already progressed through various rounds of funding, at increasing
valuations. These funding rounds start with seed funding where unicorns such as Uber
and Beyond Meat still have modest valuations in the single digit million-dollar range, all the way to Series A through D and pre-IPO funding, which happens at valuations often in the hundreds of millions to a few billiondollar range. Money exchanges hands behind closed doors and specifically, between ultra-high-net-worth institutional investors, other venture firms or syndicates. Rarely do average retail investors hear about this period of significant ROI. The average retail investor is only contacted when the time comes for venture firms to exit; i.e. the big initial public offering (IPO). 

Basic Information

Problem

95% of venture capital firms lose money, struggling to make the customary ‘venture rate-of-return’ over a 5-10-year period1. However, that’s an irrelevant problem for the average person on the street who relies on their 401k/pension fund or a low-yield cash savings ISA to generate meagre return on their behalf. After a career spent toiling for an employer, usually chasing a personal debt spiral in the bargain, one spends the remainder of their retirement years in financial mediocrity. During this period, the 1% get richer as they receive institutional level deal flow at low valuations, paving the way for ongoing wealth creation. Sadly, wealth opportunities are rarely bestowed on the 99%. Although ongoing fin-tech revolution has paved the way for certain market insight platforms like AngelList, Crunchbase and crowd-funding websites like Kickstarter, Crowdfunder or Crowdcube, it is a rare occasion that any of these showcase transformational deals or give average retail investors a shoe-in to transformational wealth.

Solution

Hatchworks Investment Committee members sit on the board of MFO Asset Management Ltd, an EU-regulated investment company managing $1.5bn through multiple alternative investment funds. Owing to these positions along with its strategic access to Spectre.ai’s DALP (decentralised autonomous liquidity pool), Hatchworks receives regular insight and overviews on many of the VC industry’s lucrative deals that are in the process of institutional funding. These deals may be Silicon-Valley based or may span the entire globe. Most recently, owing to these relationships, Hatchworks invested in Weengs, as part of its £6.5m Series A funding round3. Noteworthy is that it did so, along-side a VC syndicate comprising of Oxford Capital and others. It is worth noting that since 2017, Hatchworks has invested in over 70 companies using its rigorous portfolio construction process alongside its investment committee (IC).

Competition in Hatchworks 

The firm has no intention to compete with other venture capital companies, but rather to obtain early access to lucrative deals and open these up for HATCHTOKEN holders as and when applicable. On the market insight/product side, Hatchnet’s competitors would be platforms such as Pitchbook, Crunchbase and AngelList. While attempts by crowdfunding platforms such as Crowdfunder have been made to provide access for everyday investors to lucrative VC deals, these efforts failed4. Today, most crowdfunding platforms showcase bottom rung deals which have a high failure rate and rarely see big VC or syndicated institutional investor interest.

Initial exchange offering

Hatchworks has invested in over 70 companies using its rigorous portfolio construction process alongside its investment committee (IC). It invests in early stage companies with traction but also covers the entire gamut, starting with seed rounds all the way up to IPO and listed companies . In order to expand its investment capacity and carry out its mandate described in this paper so far, it is seeking to raise funds through the issuance of an ERC-20 digital token known as HATCHTOKEN. The firm plans to issue 200,000,000 HATCHTOKENS at a set price of $0.25/token in return for a raise of $50,000,000 which is the hard cap. The soft cap, below which the raise would be considered unsuccessful is $1,500,000.

Risks

Asset risk

After the initial exchange offering, while Hatchworks aims to restrict position sizes to no more than 1% of portfolio along with diversification on a sector level, multiple failures of investments can result in periods of drawdown.

Market risk

In the event of a global economic recession, existing portfolio investments can experience drawdown or go out of business. Furthermore, the ability to raise new deal-specific funds (Hatchfunds) can be delayed, all in all resulting in a delayed roadmap and less than efficient execution.

Key man risk

While the firm has taken legal measures to ensure longer tenures of its investment committee (IC), along with having multiple people on the IC, multiple forced departures could result in temporary periods of low manpower and thus a slowdown in deal flow being added on Hatchworks along with a slower pace of Hatchfund incubations.

Exchange

While Hatchworks taken every precaution in ensuring it is conducting its initial exchange offering with high quality exchanges in the blockchain sector, it cannot guarantee the long-term financial balance sheet durability and viability of said exchanges. These exchanges are run by separate management teams with their own risk appetite. Shutdowns of these exchanges owing to regulatory reasons or inappropriate risk management could result in a sharp drop in liquidity in HATCHTOKEN tokens.

Benefits for holders

Hatchnet

Hatchworks basic access which is worth $99.99 per year will be only available to token holders who hold the above dollar amount in HATCHTOKENs. At IEO prices this would mean around 400 tokens.

Hatchnet premium

As for premium access which is valued at $999.99 per year, token holders get access to premium filters (one of the key features and USPs of Hatchnet) including direct contact with management teams of certain portfolio companies and the ability to submit their own companies to our investment committee (IC) for due diligence. At IEO prices this privilege would mean holding around 4,000 tokens.

Hatchfunds

Token holders also obtain access to certain deals on preferential investment terms owing to Hatchworks being co-investor in said deals. As stated earlier, in order to truly democratize the VC investing process, Hatchworks will keep the minimum investment amount into its unique deal-specific funds that are setup, at just $100.00. This would mean the masses can invest in companies they otherwise not get access to. Hatchworks value this privilege at $5,000 and as such, at IEO prices, around 20,000 tokens would need to held by token holders.

Team

Also Read – Click Here for Read All ICO Review

Quote This article is writing on 9 August 2019 based on information available online & news portal. If you feel it’s outdated or incorrect, please write here to update it. Mail us: [email protected] Or Whatsapp Us- +13098896258

Not all the websites Whi listed in Top List are 100% safe to use or investment. We do not promote any of those. Due diligence is your own responsibility. You should never make an investment in an online program with money you aren’t prepared to lose. Make sure to research the website. So Please take care of your investments. and be on the safe site and avoid much losing online.

The post Hatchworks ICO Review : Demystifying VC Investing For The Masses appeared first on Coinworldstory.