RIO DE JANEIRO, BRAZIL – Familiarity with Bitcoin is currently widespread, but what if the cryptoasset concept were applied to investments in startups?
Such is Conectelo’s proposal with the creation of a decentralized governance token called DEFI Elo21. With an initial investment of R$3.5 million (US$677,000), Conectelo estimates that R$1.5 billion will be invested in startups by 2025 through its technology.
The solution, which seems complex, has a simple goal: to democratize venture capital investments in startups.
“The idea of tokenizing investments arose to solve the problem of capital not reaching startups because of bureaucracy or other obstacles. Ordinary people want to invest in startups and often can’t. Blockchain tokenization, as with cryptocurrencies, allows this. Fund guidelines can prevent startups from receiving contributions. Our company uses our intelligence as an accelerator to enable these investments,” says Conectelo’s CEO and the creator of Elo21 Token Geraldo Marques.
Marques co-founded Wibx, the first Brazilian digital retail token, now listed on Mercado Bitcoin cryptoasset brokerage.
The company’s plan is to link codified venture capital investments with startups participating in the entrepreneurship reality show “Batalha das Startups,” a Record News TV station program created by Reginaldo Pereira and which also gave rise to the digital accelerator InovaHub, through Inova360. Altogether, participating startups are valued at R$260 million.
“The novelty has the potential to foster venture investments in the Brazilian startup ecosystem in a differentiated way. This type of activity is made possible by the Legal Framework for Startups, which together with the disruption of asset tokenization through blockchain technology will foster a unique and pioneering form of risk investment in Brazilian startups,” says Janguiê Diniz, Grupo Inova SA’s chairman of the board and also founder and chairman of the board of Grupo Ser Educacional.
The basis of Elo21’s cryptoasset technology is the same used in cryptocurrencies such as Bitcoin and Etherium – blockchain – which works as an immutable virtual ledger with chain links that join together to ensure the authenticity of transactions.
“Security is the main hallmark of blockchain technology because all records made are stored there publicly and immutably. So it will always be possible for anyone to track what any individual or company has done. It’s like a gigantic public library where all the pages will be eternally preserved, also for verification by public authorities,” says Alexander Andrade Leite, attorney at Ayres Britto Consultoria Jurídica e Advocacia.
The token will initially be restricted to qualified investors. Later, it will be expanded to allow the general public to become investors in startups through the cryptoasset. Conectelo expects the minimum ticket to stand at R$1,000 in September.
Some 80% of the funds raised by Conectelo through Elo21 sales will be used to support and co-invest in startups. The first year will be one of discoveries and learning for all, because the project is innovative, pioneering, and the first where there is real backing behind the cryptoasset.
The most encouraging aspect is the fact that doors are being opened to entrepreneurship in the new economy, and the foundations for the success of the business are in place because Inova Group has one of the best startup funnels, namely the “Batalha das Startups” reality show and the InovaHub accelerator.