ICOs Are Changing the Way VCs Deal With Startups

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Gone is the time when investing in a bitcoin company was enough to make you cool.

Now, the really hip kids are into initial coin offerings, or ICOs, sales of cryptographically scarce data that offer the promise to raise millions of dollars in minutes, often with little more than a white paper and pictures of their technical team. In the first five months of this year alone, $136m has been raised in 37 token sales, according to ICO data firm Smith + Crown.

But these two worlds are colliding as some leading blockchain VCs show an increasing willingness to participate in the funding mechanism, even if the exploding price of their corresponding cryptocurrencies brings new variables into the age-old investment equation.

In conversation with CoinDesk, several leading investors in startups working with bitcoin, ethereum and other tokenized assets almost universally agreed that the explosion in cryptocurrency values has led to even more opportunity, not less, for their existing investment model.

Seeking resources beyond just capital, these crypto-startups are increasingly coming to venture capitalists in search of veteran partners and experience.

The result is not only more investment opportunities for traditional VCs, but changes to

Read more ... source: CoinDesk

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