A bitcoin syndicate cracked AngelList’s top 10 for the
first time on 21st February, just one month after it was initially formed.
Created by bitcoin venture capitalist Brock Pierce, who
founded ExpressCoin, GoCoin, KnCMiner and Robocoin Asia, the syndicate now
ranks eighth in terms of its total monetary backing, with $501,250 from 23
Syndicate backers include BitAngels Fund managing
director David Johnston, SilkRoad Equity co-founder Matthew Roszak and 500
Startups venture partner Sean Percival and SIM managing partner W Bradford
The syndicate will support 12 bitcoin-related startups
this year, with an average of $50,000 being awarded to each company. Companies
must contribute to digital currency in order to be eligible for the funds.
Angels can join the syndicate with a minimum investment
The announcement comes amid increasing investor activity
in the virtual currency space. Notably, SecondMarket’s Bitcoin Investment Trust
recently passed 80,000 BTC in holdings, while Cameron and Tyler Winklevoss just
this week submitted a revised filing for a public bitcoin ETF.
How AngelList syndicates work
AngelList allows any angel investor or fund to form a
syndicate, and for backers to then invest alongside them so that they can
collaborate on future deals.
As explained by AngelList, “backers get access to
dealflow, leads get carry and startups get access to capital”. Backers pay
5-20% carry per deal to the syndicate lead, and 5% to AngelList for
facilitating the deals.
Investors are first screened through a verification
process, and a special purpose vehicle LLC is created for each investment. Due
to US Securities and Exchange Commission (SEC) regulations, only 99 investors can
participate in the syndicate, meaning that Pierce’s fund has already reached
one-quarter of its maximum capacity.
About the investors
In addition to Pierce, the syndicate includes a noted
cast of virtual currency investors. For example, Percival is an advisor for San
Francisco-based wallet provider Blockchain.info.
Likewise, Roszak is an investor in digital currency
e-commerce and gaming provider GoCoin.com.
For more information on the fund, you can find its full
AngelList page here.
Image credit: Investment image via Shutterstock