Core Insights - Tokenization of real-world assets (RWAs) is gaining traction, with platforms like Robinhood and Kraken already listing tokenized products, while Coinbase is preparing similar offerings, indicating blockchain-based ownership is entering the financial mainstream [1] - The concept of tokenized venture capital funds could democratize investment, allowing retail investors fractional access to elite venture portfolios that were previously exclusive to institutions and insiders [2] - The liquidity issue poses a significant challenge for tokenized venture capital funds, as their value is tied to portfolio companies that may not see liquidity events for years, unlike tokenized stocks and bonds [4] Liquidity Challenges - The primary challenge in tokenizing venture capital funds is not technological but rather related to liquidity, as venture funds operate on long time horizons [4] - If tokenized venture capital units were freely traded, it could pressure founders of developing startups due to real-time performance metrics and interim valuations, potentially undermining confidence and disrupting funding rounds [5] - Liquidity events for most startups occur roughly every one to two years, making it difficult for tokens to maintain stable and accurate pricing, necessitating a rethinking of how to represent and trade these assets responsibly [6] Potential Solutions - New models are required to make tokenized venture finance feasible, with some firms experimenting with limited forms of tokenization that preserve privacy and restrict trading windows [5] - Exploration of valuation frameworks that reflect the illiquid nature of early-stage investments is underway, indicating a need for innovative approaches to address the liquidity problem [5]