Where the Money Goes When Digital Currency Startups Raise Capital
With venture capital investments in FinTech startups booming, at a record US$315 million raised in 2014 and more in 2015, we wondered: Where is all this funding being spent, and why are those in the digital currency business not living a more “FunTech” lifestyle? Stories from Silicon Valley commonly tell of newly minted tech startups splashing millions of dollars of investors' cash on lavish offices, expensive parties and high salaries. For the digital currency sector, however, the funds are visibly rolling in, but it's not always as clear where these startups spend their capital. There's....
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The U. S. Securities and Exchange Commission (SEC) announced regulations allowing crowdfunding for newer and smaller companies, which could help support bitcoin startups. These could allow companies still struggling to raise capital to gain access to funds even from alternative sources. Prior to this regulation, companies could usually raise a significant amount of capital by issuing stock or securities to wealthy individuals only after undergoing a thorough and expensive registration process under the SEC. This has been a barrier to market entry for some, as not all startups have enough....
The decentralization effects of blockchain-based cryptocurrencies are hitting the venture capital industry in more ways than one. Whereas the traditional venture capital industry is boring, the crypto-tech industry has become more exciting. Actually, I see the two models as diametrically opposed: one is a closed market, dominated by command-and-control practices, led by a few rich people on Sand Hill Road. The other is a widely open global market where anyone can play, and where the gains and risks are more evenly distributed. This has led to a re-thinking of how startups who are operating....
Airbitz, a popular bitcoin wallet provider, has announced the launch of a new crowdfunding campaign through Wefunder. Through Wefunder’s BitPay integration, Airbitz will become the first company to raise bitcoin investments in full compliance with Title III of the JOBS Act. Airbitz to Raise Funds in Compliance With SEC Rules. The JOBS Act — or the “Jumpstart Our Business Startups Act — was signed into law on April 5, 2012. The purpose of this law is to make it easier for startups to go public and raise capital privately. Title III of the Act applies specifically to crowdfunding, which....
Sequoia China is known for backing many crypto firms, including the troubled crypto lender Babel Finance, which halted withdrawals in mid-June. Sequoia Capital China, the Chinese affiliate of cryptocurrency-friendly venture capital firm Sequoia Capital, is about to raise $9 billion for its four new funds focused on Chinese startups.In raising the capital, Sequoia China has already exceeded its initial target of roughly $8 billion, The Information news agency reported on July 4, citing two people familiar with the matter.The report notes that the final amount of the raise is supposed to be....
Just a few months after the platform's production launch, the first Ethereum startups are already receiving interest, and in some cases, undisclosed investments, from digital currency-focused VC firms. Interviews with four of the leading blockchain and digital currency industry investors revealed that many are already performing due diligence on startups utilizing the decentralized application platform. Announced in 2014, Ethereum has gained significant traction of late following a successful hard fork and testing from major financial institutions. Travis Scher, investment associate at....