Blockchain Capital is a venture capital (VC) firm that invests in blockchain technology companies. The firm has recently announced Vinny Lingham, Andrew Keys, and Matthew Roszack as some of the early investors in its new “digital liquid venture fund.” It’s raising the funds through an ICO, using its BCAP Token. This is the first time a venture capital fund was raised via a digital token offering – and it’s all happening on Ethereum.
Blockchain Capital seeks to advance innovation in the blockchain space, so it’s a natural fit for the company to raise funds through an Ethereum-based token. The BCAP Token will “represent an evergreen fractional ownership in a new fund called Blockchain Capital III Digital Liquid Venture Fund, LP.” The team behind Blockchain Capital wants to bring change to the venture capital and private equity asset class. Their goal is to provide equal access to their fund for individual investors as well as institutions, helping to democratize the market. Brock Pierce, managing partner of Blockchain Capital, said:
"These thought leaders and investors have made Blockchain Capital's pursuit of the first liquidity-enhanced venture capital fund a reality. Our investors see the same gap in venture capital that we did when we started down the ICO path – the need for venture funds via a liquid, tradable, digital token that still abide by all regulatory compliance rules. Together we expect to democratize the venture capital industry and provide a unique product to the broader crypto investment community."
Blockchain Capital created its first fund in 2013 and has since invested around $40 million into 42 startups. The investment focus of its new BCAP-fueled VC fund will be in line with its established practices of identifying blockchain tech startups, led by “ambitious management teams,” and partnering with them to accelerate their growth. Lingham, co-founder and CEO of Civic (a technology partner of Blockchain Capital that is contributing its blockchain-based KYC/AML technology to the ICO), said:
"Blockchain Capital and I share a unique vision for the future of blockchain technology. The initial coin offering not only aligns with our traditional values and investment beliefs, but furthers our confidence that the venture capital industry will soon offer more flexibility in today's market climate. We are excited to work with Blockchain Capital on this unique new structure."
Blockchain Capital is reaching for its slice of the crypto-investment pie and because the ICO bubble doesn’t appear likely to burst anytime soon, using a digital token to crowdfund a venture capital fund seems like a logical decision. Keys, head of global business development at ConsenSys (which is also partnered with Blockchain Capital and will be reviewing the electronic distributed contract code for the BCAP Token), said:
"Blockchain Capital is revolutionizing venture investing by unlocking liquidity in previously illiquid secondary venture markets by tokenizing assets via Ethereum. Capital markets will be forever changed by this type of financial instrument innovation."
Due to blockchain technology’s ability to provide efficiencies and cut out middlemen when it comes to financial transactions, using Ethereum tokens to fuel VC funds may become commonplace. Blockchain Capital is looking to disrupt their own market, and it seems like they’ve got a good shot at doing just that.