I think the most interesting blockchain opportunities are with companies leveraging the technology to disrupt the way they conduct pieces of their day-to-day business. These might be companies fully built on blockchain or those smart enough to know that they only need to blockchain-enable a few strategic areas.

Numerous companies are trying to build the next SAP, the next SalesForce, the next Oracle. They’re building on top of Etherium and in some instances, like EOS and DFINITY, trying to leapfrog Etherium with their own distributed ledger to enable smart contracts and securely manage and store vast quantities of data. This is very exciting. We haven’t, for instance, had an operating system challenger to Microsoft Windows since Google put docs in the cloud. We haven’t had a real AWS challenger until companies like Storj and others came along to offer distributed cloud storage. And while undoubtedly many of these companies will have an uphill battle trying to best the entrenched leaders, there’s a tremendous amount of innovation occurring and a few will succeed. This is what gets investors excited — the opportunity to partner with companies disrupting the status quo.

I’m often asked whether venture capitalists should worry about blockchain entrepreneurs bypassing venture capital for their own ICO’s (Initial Coin Offerings) and the answer is no. The most promising cryptocurrency and blockchain companies need substantial funds to compete not just among themselves but against today’s tech giants. An ICO may help them get started but they still look to the networks and knowledge of venture capitalists to help them scale their businesses. Some of the most high profile token sales have used a combination of “whales” and institutional money. Additionally, the Securities and Exchange Commission (SEC) is watching the legitimacy of ICOs and took action this week against a potential ICO scam. I anticipate that the SEC will increase regulation or make ICOs illegal in the future creating issues for startups funded using this method.

A few weeks ago, Science, Inc. revealed it had raised $12M of its stated $100M goal for its blockchain incubator. This is an example where partnering with the VC community may have been a better strategy. Why? The wealthy individual investor who have been investing in ICOs are becoming increasingly scarcer as they wait for liquidity in existing investments. We may still see a number of successful ICOs in 2018 but my prediction is that there will be a more symbiotic blend of financing for blockchain companies next year.