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Why Web3 VCs Are Struggling With Token Management (and How VTVL Fixes This)

Sep 8, 2023

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Tokens are often the lifeblood of Web3 projects. They can provide innovative incentive mechanisms, value capture, and can even be used to vote for protocol changes via governance mechanics.

In Web3 venture capital, tokens are commonly used as a replacement for equity. This allows investors to have direct custody over the equity they own in a project, bringing along many benefits over the traditional paper equity model. However, as more projects launch tokens,

managing these investments has become a struggle for the vast majority of venture capital funds.

Tasks such as tracking, claiming, and monitoring token-based investments can become overwhelming, especially for VC firms with a ton of investments and vesting schedules.

Take, for example, Animoca Brands, which boasts an extensive portfolio of over 450 investments with a large portion of those being liquid tokens. For each token in their portfolio, a team member has to manually claim unlocked tokens from the vesting smart contract, ensure the tokens are claimed to a specific cold wallet, and record details for each claim - with this process repeating on a monthly basis. The sheer workload of managing such a large portfolio can be immense.

But it’s not just Animoca or the top 1% of Web3 funds with this issue, it’s most of them! Talking with over 116 VCs, we quickly realized that this was a common issue shared by a majority of funds operating in the Web3 space.

In fact, in the past 4 years alone over $40 billion has been raised by crypto funds - yet token issuance and claiming is still manual, leaving teams and investors with a lack of visibility and control.

All of this adds up to the following challenges for Web3 funds:

  • Manual tracking and claiming: $1bn worth of tokens have been lost through human error and 80% of digital asset managers report inefficient processes including calendar reminders or manual claims from Etherscan.
  • Waste of time and money: Token claimers spend an average of 980 hours/year to manually claim their tokens and update their spreadsheets for reporting.
  • Lack of technical expertise: Costly and inefficient in-house platform development, costing firms up to $500k/year to set up or valuable employee time to develop.

To address these problems, we began working on prototypes and talking with a wide variety of Web3 funds, learning from their current workflows and pain points and building a product to help them optimize their operations. This led to us creating our newest product, VTVL Institutional.

VTVL Institutional offers a seamless solution for streamlining token management. It empowers venture capital funds to simplify their workflow, enhance efficiency, and ensure accurate management of token-based investments.

Unleashing The Power of VTVL Institutional

1) Token Claims, Tracking, and Reporting

VTVL Institutional is vesting contract agnostic, allowing investors to add any vesting contract to their dashboard no matter the blockchain or vesting provider. Investors can get insights into their token unlock schedule and directly claim tokens to a wallet of their choice with the click of a button. All token claims are displayed on the VTVL dashboard along with transaction IDs, total claimed amounts, and easy CSV export.

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2) Real Time Portfolio Performance

VTVL also empowers investors with robust portfolio monitoring capabilities, allowing VCs to conveniently monitor the performance of vested and non-vested tokens while enabling seamless LP reporting.

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3) Seamless Treasury Control

In addition to tracking, claiming, and reporting, VTVL Institutional also helps with execution in the form of treasury management. VCs can easily stake their claimed tokens with third-party providers, automate token swaps, and set up alerts when specific prices are reached.

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The Future of VTVL Institutional

While VTVL Institutional is still in beta, we’ve got a lot planned for the future with many exciting product features arriving soon, including planned support for RWAs! If you’d like to get early access and help shape the future of VTVL Institutional into the ultimate toolkit for Web3 funds, we’d love to hear from you, please reach out for early access using the link below!

https://vtvl.io/institutional/early-access