Despite the rise of so-called initial coin offerings, or ICOs, cryptocurrency startups are still landing venture capital funding. US venture capital firm Venrock Associates is now branching out into the cryptocurrency space as the company that sprang from the Rockefeller fortune wants to get a piece of the action.
David Pakman, a partner at the New York-based firm, told Bloomberg that the VC fund will invest explicitly in firms that focus on blockchain and digital currencies.
Venrock plans to invest in blockchain startups using the traditional venture capital fashion, offering cash in return for equity, before any potential ICO. It’s too early to say for certain whether the change will lead to outsized investment returns, but Pakman says these tokens have the potential to increase in value and can be traded – thus providing investors with a means to cash in.
“I think this is one of the most transformative tech ecosystems and has the possibility of creating hundreds of companies worth billions of dollars each,” Pakman said.
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Venrock has already joined a Brooklyn-based cryptocurrency investor group called CoinFund, which helps startups build blockchain-based projects.
“I am approaching this from the very first that this is a fundamentally interesting technological innovation that enabled very serious value creation and may also be a legitimate way to build value away from internet platforms of today,” Pakman added.
Venrock was established in 1969 by the grandson of John Rockefeller as the investment business of the Rockefeller family, although the firm opened up to outside investors in 1995.
Over the years, Venrock invested in what would later become web giants, including Intel, Apple, and LinkedIn, among many other big winners. As such, the firm is also feeling the lure of cryptocurrencies and fear the potential downside if they miss the boat.