Research Paper 36: How Distributed-Ledger Technologies Are Shaping Capital Markets and Venture Capital

In a new research paper, Monika Köppl-Turyna and Andreas Frankl present, for the first time, a conceptual model that systematically examines how distributed ledger technologies (DLT)—including blockchain and tokenization technologies—are transforming capital markets and what impact these changes may have on venture capital investment.

While numerous studies have examined the impact of DLT on financial markets or on venture capital separately, a theoretical framework linking these two fields of research has been lacking. This paper closes that gap by developing a conceptual model that systematically describes the key mechanisms of interaction between DLT, capital market structures, and venture capital.

The authors identify four key mechanisms: changes in capital market processes, systemic risk, market access, and liquidity. Distributed ledger technologies can, for example, accelerate settlement and trading processes, reduce transaction costs, enable new forms of tokenization, and expand the pool of potential investors. This is relevant for venture capital, since improved liquidity, easier access to capital markets, and additional exit opportunities can transform how portfolio companies are financed and monetized.

The paper is based on a systematic review of the international academic literature. Drawing on more than 1,200 scholarly publications, the authors developed a theoretically grounded model intended to serve as a foundation for future empirical research. In doing so, the paper contributes to the current debate on the future of digital capital markets and highlights the role that technological innovations could play in financing, entrepreneurship, and competitiveness going forward.