New Paradigm of Web3 Investment: The Logic and Challenges of Incubation Investment

With the changes in the cryptocurrency market, the Web3 investment sector is undergoing a paradigm shift. The traditional "invest-wait-exit" model is giving way to a more deeply engaged incubation investment approach. This new model is not just about injecting funds, but also about comprehensive resource integration and capability empowerment.

The Core Logic of Incubation Investment

In the current environment where Web3 projects are struggling to ignite the market solely through financing news, investors are beginning to realize that simply providing funding is no longer sufficient to drive project development. Incubation-style investment has emerged, transforming investors from mere providers of capital into deep participants and co-builders of projects.

This investment model typically includes the following key stages:

1. Ecological Empowerment: Providing projects with key resources such as user traffic and wallet integration to help projects quickly acquire an initial user base.

2. Technical Support: Providing professional support in areas such as underlying architecture, security audits, and product testing.

3. Marketing Promotion: Assist the project in comprehensive promotion through content marketing, community operation, joint activities, etc.

4. Compliance Collaboration: Providing full legal support for the project from pre-investment due diligence to subsequent compliance consulting.

Some well-known institutions, such as the investment departments of certain trading platforms, have been practicing this model by providing comprehensive ecological resource support to help invested projects grow rapidly. Even some traditional venture capital institutions have begun to integrate incubation concepts into their investment systems, offering all-around support for projects ranging from team training to government relations.

Legal Challenges of Incubation Investments

However, deep involvement also means greater legal risks. The main challenges faced by incubator investments include:

1. Blurred identity boundaries: Investors may be regarded as the "de facto controllers" of the project, bearing more legal responsibilities.

2. Complex revenue model: Diverse revenue methods may involve compliance issues such as securities issuance and tax declarations.

3. Token Risk: The issuance and circulation of tokens remain a key focus area for regulation.

Compliance Strategy

To address these challenges, investors may consider the following strategies:

1. Establish a professional investment structure: isolate personal risk by setting up offshore entities.

2. Carefully design the token model: avoid the token being viewed as a security, emphasizing its functionality rather than its investment attributes.

3. Choose the appropriate legal jurisdiction: Select a suitable regulatory environment based on the project's target market.

Conclusion

Incubator-type investments have brought new opportunities to the Web3 field, but they also come with higher risks and responsibilities. Investors need to weigh their own resources and risk tolerance to choose an appropriate way to participate. For investors who are willing to engage deeply and have the ability to integrate resources, incubator-type investments not only have the potential for substantial returns but also represent an excellent opportunity to participate in the construction of the Web3 ecosystem.