What are the advantages of the proposed strategy?

1. You no longer need to identify a cash-rich Anchor Investor but an asset-rich Partner.
   There are significantly more non-cash-asset-rich people than cash-rich people simply because cash is not an attractive asset to hold in a portfolio.
2. You no longer need to acquire the initial asset(s) because they are brought in by the "Anchor Investor"
3. Your Anchor Investor is likely to be an expert in the management of the asset(s) he owns and you can partner with him to co-manage the Fund
4. You now have a Fund, with asset(s), and an expert in asset management on board
   The initial asset(s) and the Anchor Investor's expertise bring the credentials needed by the Fund to raise further funding.

This all looks good, but how do I monetise my Assets?

Find the golden berg (gold mountain)

Before addressing the asset monetisation process, let's us ask ourselves the question:

Where is the money?

Thanks to the COVID,  we have nowadays trillions of public money floating out there, but it is unlikely that this money can be used to set up a privately owned Fund. Maybe at a later stage for leverage?

You also have a lot of money in existing Funds like The Blackstone Group, The Carlyle Group, KKR & Co etc. "The winner takes it all" says the song and the top-Funds are fully loaded. Unfortunately, they are not friends of would-be Fund Managers, but rather competitors.

The bulk of the money is managed by institutional investors the like of pension funds, but they tend to invest very large tranches and only in regulated instruments. They are our best bet to grow our Fund aggressively, but not until we have built our credentials.

The uncovered vault of money is in the hand of cryptocurrency owners. There are close to 19 million Bitcoins valued at around $40k each at the time of this article. Just in Bitcoins, there are c.a $700 billion on the blockchain, followed by Etherum, $300 billion, Tether, $58 billion, Binance Coins, $57 billion, DogeCoins, 53$ B and another 5 000+ cryptocurrencies.

We have found our golden berg, let's see now how to mine it.

Value the asset

The first step to monetise a non-cash asset is to value it. If it is gold, it is easy, you will generally use the LBMA second fixing price. If it is real estate, you can eventually rely on reputable auditors. If it is a large listed company, you have credit rating agencies like S&P and Moody's, but what happens if your asset is a startup ? or a real estate development? or a piece of art?

You need a "Digital Asset Rating Agent (DARA)".  The asset is in the real world, the security token issued against the asset in the digital world. The DARA shall put a value on the security token. Both valuations should converge.

The DARA's valuation will help you convince investors to acquire your security tokens.

Know your potential investors

Why will this strategy be successful?

To understand why this strategy will be successful, we need to understand the risk profile of the investors. Every investor has got a risk profile, from risk-averse to risk-taker. To invest in an early stage Fund, one needs to be a risk-taker.

Institutional investors are risk-averse and therefore, likely to invest only in consolidated Funds.

Risk takers will be either hands-on or hands-off investors. Hands-on investors want to know in which assets their money is invested and have a say on the investment decision. They are unlikely to invest in a Fund managed by third parties.

Our target anchor investor is therefore likely to be a risk-taker and a hands-off investor.

What is the profile of a cryptocurrency owner?

There are multiple sorts of cryptocurrency owners so let's try to segment them into categories:

Miners

Miners have earned their cryptos through proof of works or proof of stake. There are likely to be young sophisticated technologists. They will value their crypto in the mirror of the effort that it took them to create them rather than in the amount of cash that they would have had to spend to acquire them. They may be idealists and even antisystem.

They understand the crypto world and may be extremely rich - that is in cryptos value - and looking for ways to invest in the real world. Given their youth, they may not be in a hurry to swap their cryptos for fiat money, which they may not trust as a reliable asset.

Chinese investors

It is hard to tell because of the opacity of the market, but as much as 50% of all BTC may be owned by Chinese investors looking to invest outside of China. They are looking for investment opportunities in the real world and are unlikely to be long-time crypto holders.

Later-stage investors

I would put into that category would-be investors lured by the sirens of crypto-related success stories. Late-stage investors are unlikely to have made a lot of money with their cryptos yet, but they are trying hard to uncover the next shooting star.

Large organisations

A few large organisations have already adopted cryptocurrencies and the trend is accelerating in the wake of Elon Musk's ebb and flow. Large organisations have acquired cryptos to trade their goods and services and have no intention to invest in third-party Funds. Fortunately, they only represent a minority of crypto investors.

Dodgy investors

Bitcoin is helping nefarious organisations transfer and launder dirty money. No doubt that they are risk-takers.

Lucky early-stage investors

Imagine that you acquired 1000 BTC at 10 cents each and forgot about them until recently. All of a sudden, you are a millionaire and you do not even know why. Now, what are you going to do with your fortune?

Gamblers

If you did not forget about your cryptos, you need to have had solid nerves to hold them on your portfolio as their valuation looks like a roller-coaster.

Islamic investors

The Islamic law forbids investors to make money out of money. With cryptocurrencies, many Islamic investors have found a workaround as well as a way to invest in occidental countries.