How Small Investors Can Benefit from Blockchain Funds
Investing into blockchain startups can be rather challenging for small investors. Nevertheless, working with funds can open new opportunities for them.
By Julia SakovichUpdated
3 mins readPhoto: Randy Benderson / Flickr
It is obvious that investing (regardless of which type of market we are talking about) can be a rather difficult task, especially for those who still haven’t gained enough experience and knowledge in this sphere. Without any doubts it is absolutely true about the blockchain market.
Nobody will deny that fear of scam, security issues as well as lack of understanding of the market can prevent small investors from making the right choice. But there is another problem for them – they just do not have an opportunity to communicate directly with startups. And it is a significant difference between small and larger investors.
To survive and operate, blockchain projects need to have huge amounts of capital. If you have a startup you need to pay to your team, allocate money for go-to-market strategies and legal fees associated with regulations. As a result, there is no surprise that a lot of startups count on funding from established funds.
Nevertheless, nowadays, there are such blockchain funds that can enhance the opportunities of small investors in ICOs. Being large investors, they have influence over their interaction and their transactions with various startups. They can establish such terms and requirements on special deals that an average small investor just won’t have a possibility to meet them. Moreover, they can get special discounts on their investments thanks to the volumes of capital that they promise to bring in.
A mixed contract is one of such schemes with special terms. According to Nick Evdokimov, one of the experts and pioneers in this sphere, such a scheme starts working when a fund wants to purchase equity in a blockchain startup.
As a rule, funds do not have a possibility to buy tokens directly. That’s why, this fund purchases shares in the startup and then it gets an amount of tokens that is equivalent to the price of purchased shares as insurance on its investment.
As you can see from such terms, the fund has a more privileged position if compared with other investors. Funds can get much more profit in the long-term and in the short-term thanks to their access to a startups’ equity and its tokens.
At the same time, if a small investor offered similar terms to a startup, such a proposal would be rejected. In such a situation, we can make a conclusion that small investors can have more opportunities if they invest through a fund than if they decide to invest directly in the same startup.
Another advantage of working with funds for small investors is that they get an opportunity to take part in ICOs without providing large capital volumes. It is also rather beneficial for funds that have a chance to create a good pool of investors.
Working with funds, investors get the discounts available for funds as well as both tokens and equity. But when they make their investments directly through the ICO, they obtain only utility tokens.
That’s why it is very important for small investors to know that such opportunities exist. Investing in startups through a fund can significantly reduce risks and bring more benefits.
I’m a content writer and editor with extensive experience creating high-quality content across a range of industries. Currently, I serve as the Editor-in-Chief at Coinspeaker, where I lead content strategy, oversee editorial workflows, and ensure that every piece meets the highest standards. In this role, I collaborate closely with writers, researchers, and industry experts to deliver content that not only informs and educates but also sparks meaningful discussion around innovation.
Much of my work focuses on blockchain, cryptocurrencies, artificial intelligence, and software development, where I bring together editorial expertise, subject knowledge, and leadership experience to shape meaningful conversations about technology and its real-world impact. I’m particularly passionate about exploring how emerging technologies intersect with business, society, and everyday life. Whether I’m writing about decentralized finance, AI applications, or the latest in software development, my goal is always to make complex subjects accessible, relevant, and valuable to readers.
My academic background has played an important role in shaping my approach to content. I studied Intercultural Communications, PR, and Translation at Minsk State Linguistic University, and later pursued a Master’s degree in Economics and Management at the Belarusian State Economic University. The combination of linguistic, communication, and business training has given me the ability to translate complex technical and economic concepts into clear, engaging narratives for diverse audiences.
Over the years, my articles have been featured on a variety of platforms. In addition to contributing to company blogs—primarily for software development agencies—my work has appeared in well-regarded outlets such as SwissCognitive, HackerNoon, Tech Company News, and SmallBizClub, among others.
