Blockchain Capital offers investors a new take on initial coin offerings.
On April 20, 2017, the San Francisco venture firm made history by offering the first digital token backed by a venture capital firm, raising $10 million in six hours from investors. Blockchain also announced Thursday that Parity Technologies, creator of the Parity Ethereum software, is a target for investment. Parity built an ethereum client that integrates directly into browsers.
Brock Pierce, co-founder of Blockchain Capital, told Reuters that the move toward virtual currency represents a desire to "democratize access" and provide "enhanced liquidity to the venture capital asset class.”
Pierce is also chairman of the Bitcoin Foundation. A pioneer in the field of virtual currency, he’s raised more than $200 million for the companies has founded.
The success of this initial coin offering (ICO) might inspire other firms to take action. While raising capital can take months, sometimes years, blockchain companies have been able to get faster results; iEx.ec recently raked in million in minutes, netting a total of $12 million with its ICO. The rapidity of fundraising in the virtual sector coupled with more options for investors has proven to be a combination that cultivates huge support for startup companies with innovative goals.
The shift means a change in the way investors can access their funds, letting them use a more liquid asset, BCAP tokens. As previously reported by ETHNews, BCAP tokens represent fractional ownership of a fund labeled Blockchain Capital III Digital Liquid Venture Fund. These tokens were offered to bullish investors who flocked to the opportunity.
"Most people don't want to be locked up for five to 10 years in an investment," Pierce said. "If there is liquidity as in a token sale, that dynamic changes everything."