Traditional venture capitalists are stepping in where initial coin offering investors fear to tread.
In its latest report, blockchain research group Diar reports blockchain and cryptocurrency startups have raised nearly $3.9 billion through VC investments in the first three quarters of the year, which is a 280 percent increase compared to the whole of 2017.
VCs don’t have the headaches of ICOs. “Non-equity ICOs are not only scrutinized by the regulators but the founders also have very misaligned incentives as there is no contractual obligation to deliver a product, a reality that to date seems to be the case with few launches, and even less adoption,” according to Diar. “The amount that was raised through ICOs as well as the number of projects successfully completing an ICO is now approaching a one-year low.”
Diar analyzed the 50 most active investors, which it said have invested in at least eight blockchain companies. “Approximately 52 percent of investments are by investors who are not exclusively focused on investing in blockchain,” it found. “And as far as location, the U.S. is by and far leading the chart.”
The most active VC investor was found to be Barry Silbert’s Digital Currency Group followed by Blockchain Capital and Pantera Capital. The most active traditional VC firms are Andreessen Horowitz, Danhua Capital and Future Perfect Ventures.
