Blockstack to Launch $25M Venture Capital Fund

Announcements, Blockchain, FinTech, ICO News, Innovation, Investing, News | August 17, 2017 By:

New York-based decentralized Internet and developer platform Blockstack is launching a $25 million venture capital fund to back development teams utilizing its technology.

Called Blockstack Signature Fund, the fund is backed by Lux, OpenOcean, VersionOne, RisingTide, and Compound.  Funding will go toward apps built in the Blockstack ecosystem.

Developers on the platform will also be eligible for XPRIZE-style prizes and bounties for large initiatives, such as building a decentralized microblogging platform. That will be funded by investors like AngelList founder Naval Ravikant and USV managing partner Albert Wenger.

Blockstack said that by combining the new initial coin offering (ICO) model with traditional venture capital (VC) funding, the company is aiming to establish an overall new funding model for the space without encountering the problems associated with past ICOs.

Blockstack co-founder Muneeb Ali said the Blockstack Signature Fund would connect the venture capital world with decentralized app developers in a more effective route than the straight-to-retail ICOs that have proved so prominent in recent months.

“What we are doing is opening up this channel between app developers on Blockstack and venture capital, so that (developers) can actually go and talk to these investors, get feedback from them and then potentially get some money to build out their apps,” said Ali.

Ali added that the VCs involved in the fund will take a look at that application and make an independent decision to fund that company or not. “Our intention here is to bring together sophisticated investors, people who have been thinking a lot about decentralization and can do their due diligence,” he said.

Blockstack also plans to raise additional funding via an ICO, in which it will sell its own cryptocurrency to set a precedent for other apps that will use its platform.

“When we feel that the platform is ready and we can actually enable it for some of our developers, then you will see something [on Blockstack’s platform] very similar to ERC-20 [an ethereum token standard]. But we believe it will be much-better fleshed out and easier to use in production,” said Ali.