ICO Meets VC: Blockstack Raises $25 Million for Decentralized Internet Fund

ICO Meets VC: Blockstack Raises $25 Million for Decentralized Internet Fund

While @initial coin offerings (ICOs) have fast become the breakout method for @blockchain fundraising, at least one industry startup thinks there's still a place for traditional venture @capital in this new economic movement.Today, New York-based @Blockstack is launching a $25 million venture capital fund aimed at jumpstarting a new, decentralized version of the internet. But more notable than the money, is who's allocating it. Unlike the many ICOs that are raising funds through retail investors, the @Blockstack Signature Fund will only distribute money from active venture capitalists.As such, @Blockstack co-founder Muneeb Ali positioned the fund as a way to bring together decentralized app builders and the venture capital @community.

"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."

The fund is backed by venture @capital firms Lux Capital, @OpenOcean, RisingTide Capital, Compound and VersionOne.Each firm has committed resources to the fund, and will evaluate investment opportunities in @exchange for a stake in the innovator's company on a case-by-case basis. Currently, @Blockstack isn't releasing the fund's expected average investment size, but those involved predict it will be equivalent to a traditional Series A funding round."We think that traditional venture capital has its place, and a very important place in this ecosystem, along with these new ways of raising money," Ali said.

• ICO in the works

That's not to say the company is eschewing the @ICO strategy for itself, however.Founded in 2013, @Blockstack has so far raised $5.45 million in venture capital to build a decentralized @protocol layer that sits on top of a number of @blockchains, including @bitcoin, @ethereum and zcash.With an entire stack of tools similar to those provided by Apple to its app developers, and a recently released decentralized internet browser the founders compare to Netscape, Blockstack hopes to integrate any number of distributed ledgers into a single layer that's easily browsable from any device.But to get to that next step, @Blockstack 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.According to Ali:

"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."

• Blockchain x-prize

@Blockstack also revealed that it's in the early stages of launching an award, modeled after the renowned @XPRIZE established by entrepreneur Peter Diamandis and @Google director Ray Kurzweil to incentivize radical technological development that benefits humanity.While original @XPRIZE participants have created everything from space travel solutions to Star Trek-inspired medical devices, @Blockstack's "x-prize" will be focused on motivating developers to build solutions to some of @blockchain’s oldest unfulfilled promises, ranging from a decentralized @Twitter to a decentralized publishing platform like Medium.Details about which investors will back the awards are forthcoming, but Ali hinted that two of Blockstack's most well-known investors might be keen, saying:

"Some high-profile investors are willing to put up these prizes for specific apps. We’re pretty excited about that, but we’re ironing out the details."