Panxora Digital Ventures launches hybrid seed funding initiative

By Sunniva Kolostyak

Panxora Digital Ventures, part of the Panxora Group, has announced the launch of a hybrid seed funding solution to encourage investments into new blockchain token projects.

The Panxora model uses a two-stage fundraising process to stimulate a stagnant capital market, bridging the gap between seed investors’ interests and token founders’ needs to produce win-win results.

Gavin Smith, CEO at Panxora, explained that the model would provide capital to finance token sales for project founders while offering early-stage investors a clearer path to profitability – addressing challenges on both sides.

“Investors see our hybrid methodology not only as a structure that will improve the performance of projects, but a low-cost way to get involved with promising projects early so they will be well-positioned to reap subsequent rewards. Using our hybrid approach, early-stage investors can spread their capital across more opportunities and have several different ways to generate an improved return,” Smith said.

Of the investment, 30 per cent is allocated to a licensed large-cap crypto hedge fund to reward early investors for the risk they assume for their early participation. Seed investors also receive utility tokens at private sale prices and a share in future revenue generated by the token project or in many cases an option to convert this to equity.

Investors expect a clear vision of how they can make a return, and often seek a significant equity slice in exchange for funding. At the same time, tighter legal frameworks and skyrocketing marketing costs are making token launches whether ICOs or IEOs far more expensive, increasing founders’ demand for financing.

With this model, investors who have become less willing to commit capital to new projects due to the poor return on investment and deteriorating risk/reward profile will get a more attractive offering.

Panxora only offers this investment structure for projects where it is making an investment. Moreover, extra assurance is provided by ensuring that two-thirds of the funds raised during the token sale are placed in a ‘Governance Account’ held by FCA regulated custodian KOINE. The funds are hedged against cryptocurrency price volatility.

At the end of thirty months, the SPV is dissolved and pay-outs are made to seed investors, including the profit and principal originally invested in the large-cap crypto hedge fund. In some cases, an option to convert to an equity stake is also possible.

Marcie Terman, COO at Panxora, added: “This type of investment structure while unknown in the cryptocurrency market is common in other alternative investment classes. This makes the hybrid investment structure not only attractive to token investors already committed to the industry, it opens the door to conventional investors who have been looking for their first or second foray into cryptocurrency, just waiting for the right deal to emerge.”