The importance of being alert in capital negotiations

November 30, 2022 | 13:00
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Based on experience of raising funds for blockchain projects, William Do, CEO of HOBBIT Investment, explained to VIR’s Anh Hoa why it is critical to be alert in deals, identify the actual status of the project to avoid risks, and figure out investment priorities.

Investors are currently being cautious in their search for funds to invest in blockchain technology, cryptocurrencies, and so on. How do you capitalise on the advantages you have?

Capital market competition is about the quality of the relationship, whether it is in Dubai, where capital is plentiful, or any other regions. However, otherwise build a quality business relationship, a quality product is expected as the foundation, and to ensure a quality product, capital is required. In this case, the chicken and egg problem applies.

Typically, an investment fund in the blockchain technology industry will raise capital from their own community or from shareholder members to begin the journey of building a portfolio. If the projects in which they invest are successful, the investment fund may be able to use the profits to persuade individual investors or the community to continue participating in a variety of other projects of their choosing. Finding a suitable and high-quality project to invest in, on the other hand, is a different matter.

We have a strong relationship network and a large capital scale for Triple-A and metaverse game projects. Similarly to the preceding formula, it took us a long time to evaluate and select projects. Once collaborations with the project takes place, we build and develop together despite many challenges.

The importance of being alert in capital negotiations
William Do, CEO of HOBBIT Investment

After taking part in fundraising rounds for your projects, what experiences do you draw?

The blockchain market in Vietnam has recently become quite hot, with scams appearing, causing investor distrust. This cannot be avoided. As a result, investors must increasingly prepare and update themselves with the necessary knowledge to select the right project for themselves. In my opinion, the transparency of Vietnamese blockchain startup projects can be greatly improved if investors assess the project’s quality objectively and do not gloss over problems.

Based on these factors, the fundraising process for each project will be unique. Congestion will be largely determined by these factors as well, resulting in a weakened negotiating position.

According to experts, when the market is falling and slowing down in some areas, investment funds must assess their portfolio structure and preserve money. How is your fund restructuring its portfolio?

We’ve built our own portfolio criteria since the beginning of our venture capital adventure. This is based on the blockchain technology industry’s long-term vision and the technology’s application journey in the consumer ecosystem, which related industries. Even though the market is dropping and having a small impact on business activities, we still have a basis to carry out our mission and an increasingly sustainable belief in our goals.

What could be the next promising project and the key for you to raise capital in the near future?

Our current goal is to build a bridge to the digital asset era for traditional organisations, businesses, investors, and consumers in Vietnam and Southeast Asia in general.

Our strength is the use of overseas resources, particularly in the United Arab Emirates, where Dubai is the global blockchain industry’s capital. To take that advantage, we pre-prepare the suitable projects, have a product or service test run time, and have the ability to integrate with completed projects. As a result, the typical project to raise capital next is already planned. The figures will be calculated based on the current situation and announced later via official news sites.

What are the barriers for the fund to keep looking for projects?

When a blockchain startup in Vietnam that uses cryptocurrencies to raise capital is not legalised, the psychological barrier from investors appears to be the first factor preventing the development of the local blockchain market.

When “cryptocurrency” is mentioned within the local community, many people do not understand blockchain tech platforms, and this fear leads to the project itself being rejected by the founding team. As a result, Vietnamese blockchain startups tend to build platforms outside of Vietnam, limiting legal and community risks. As a result, huge capital flows from investors will hardly arrive in Vietnam if this continues.

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By Anh Hoa

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