The Bitcoin world is still divided on the role of venture investment in the ecosystem. Should Bitcoin startups look to venture capitalists to fund their ideas or use the Bitcoin blockchain to monetize their products? Some of the most prolific investors in Bitcoin startups shared the stage on Day 3 of CoinGeek Live to discuss the role of venture investment in Bitcoin’s future.
Moderated by Bitcoin Association Founding President Jimmy Nguyen, the panel brought together Paul Rajchgod, the managing director of private equity at Ayre Group; Zach Resnick, managing partner at Unbounded Capital; Jan Smit, the general partner at Two Hop Ventures; and Bradley Rotter, a VC veteran and co-founder of Entanglement Research Institute.
Rotter is new to the Bitcoin SV (BSV) ecosystem who has been introduced to the world of opportunities BSV offers by Zach Resnick and the team from Unbounded Capital. While he has been investing in digital currencies since 2013, Rotter described BSV as “the most exciting digital currency protocol” he has seen.
The investors shared some of the things they consider before investing in a project. For Ayre Group, which is one of the most prolific Bitcoin investors, the focus has been shifting from early stage startups to growth stage companies. Most of these companies defect to BSV from other blockchains “bringing a lot of transactions and value to the BSV ecosystem,” Rajchgod said.
For Unbounded Capital and Two Hop Ventures, the focus is still on early stage companies. The two VCs have a special focus on companies building infrastructure that allows other companies to build on Bitcoin SV. They include HandCash, Planaria, Run, Centi and Centbee.
Ayre Group has also been keen on companies that “are looking to use BSV’s capabilities as part of their backbone/plumbing,” Rajchgod revealed. These type of companies—including Transmira, Kompany and Centi—have been relying on BSV to solve challenges and offer products that target beyond the BSV ecosystem.
“When they are successful, they bring the masses to Bitcoin,” he said.
He cited GeoSpock, a company that announced on Day 3 of CoinGeek Live that it had raised $5.4 million in an investment round led by nChain. The data analysis and integration startup also attracted investment from Sony Ventures-backed Global Brain and NTT Docomo, one of the world’s largest telecom. Such investments prove that startups offering BSV-powered solutions can rise beyond the Bitcoin world, Rajchgod remarked.
The panel also talked about whether startups should look for venture funding or avoid it altogether, a topic that’s constantly debated in Bitcoin circles. While unanimously agreeing that Bitcoin has made it easier for startups to monetize their services and generate revenue, they concluded that venture funding is still important to allow startups to fund their products, especially in the early stages.
The future is bright for the venture funding sector in BSV, Unbounded’s Resnick pointed out. His firm has been engaging with other VCs about the opportunities in the BSV space and he believes that in the near future, these VCs will flood the BSV ecosystem seeking to be part of the Bitcoin revolution.
Nguyen concluded by reminding startup founders that there’s no one-size-fits-all approach when it comes to venture funding.
“Life is great because it’s full of diversity of approaches and ideas and that’s also what makes Bitcoin a total win.”
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