Kleiner Perkins Caufield and Byers (KPCB), a Silicon Valley venture capital firm best known for its investments in Google, AOL, Twitter, Uber and Amazon, has introduced a fund called the Edge Seed Fund, which is set to focus on helping early stage Bitcoin- and blockchain-based startups.
The Edge fund, led by Kleiner Perkins partners Mike Abbott and Anjney Midha, plans to offer investments of $250,000 to support selected startups in developing and programming platforms, products and services. The $4 million fund will be operated by former Google product manager Ruby Lee, and the founder of bitcoin and dogecoin transaction service Backlash, Roneil Rumberg.
To help early-stage startups from losing equity in its first few funding rounds, the firm is set to take a different approach for its investments. Instead of taking equity from its startups, the startups will issue a debt-like account called uncapped convertible notes to the VC firm, which can be reclaimed by the startup at any time.
Midha explained that such an approach will assert less pressure on the startups for another funding round, as it will not provide a startup with a specific valuation. Additionally, the startups can choose to reclaim the convertible notes and convert it to stocks completing their next funding round.
As of now, the firm has decided to take a more proactive approach and has begun to reach out for possible candidates, TechCrunch reported, “Midha will spend around a half hour to 45 minutes meeting with companies and then say they will give a final verdict on an investment in around 72 hours. The goal is to be as ‘founder friendly’ as possible — though, in theory, most firms would say they would be shooting for that goal.”
The establishment of the Edge fund follows the recent announcement of a popular startup accelerator, Boost VC’s announcement to end its focus on Bitcoin startups.
As Bitcoin Magazine reported on June 8, Boost VC stated that the firm will diversify its investments toward virtual reality technology, while still continuing to fund Bitcoin startups. Last year, Boost VC promised that the firm will accelerate and fund 100 Bitcoin companies by 2017. So far, Boost VC has successfully funded more than 50 startups and is set to fund more in its new startup program called Tribe 6.
As KPCB shifts its focus on hot startups in the Bitcoin and drone industry, the firm may possibly work with Boost VC to find potential candidates for its investments. Currently, the possible candidates are said to be BlockCypher and OneName, both of which have been part of the firm’s podcast series and were funded by Boost VC.
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Joseph is a web developer and designer, writer and a passionate musician who loves to travel. He has worked as a researcher for a number of venture capital firms and as a freelancer designer for resorts and corporations in Korea and the Philippines.