U.S. venture capital's digital coin quandary: cash-rich startups
2017-07-31
U.S. venture capital's digital coin quandary: cash-rich startups

 

 

 

 


NEW YORK (Reuters) - U.S. venture capital firms lining up for a slice of the burgeoning digital currency market are grappling with a novel challenge - some of the hottest tech startups that sell the coins just don't need their money.

Only a few years ago, digital currency entrepreneurs, like other Silicon Valley peers, had to line up to pitch their ideas to venture capitalists, who controlled their destiny as virtually the only source of funding.

So-called initial coin offerings (ICOs), where new tech companies using blockchain technology can raise millions quickly by creating and selling digital "tokens," with no regulatory oversight, have turned traditional relationships upside down.

Blockchain, a public online ledger of transactions, gained prominence as a technology that underpinned the first digital currency, bitcoin.