Pantera Capital has announced they are launching a new hedge fund called Pantera ICO Fund LP, that will focus on investments solely in tokens that power public Blockchain protocols. Pantera intends to raise $100m, with $35m already in place. The rest will come from a number of other high profile investors and VCs that remain unnamed.
Dan Morehead, Pantera’s CEO along with Augur’s Joey Krug will head the fund.
From an interview at Coindesk:
“Six months ago, ICOs were a few million dollars,” Morehead told CoinDesk. Even ethereum’s crowdsale was only $18m. I think, with Kik, we’re at a watershed moment, a company with millions of active users is transitioning to open source.”
“If you look at the tokens, they fall into two categories. Rent-seeking tokens, where you can remove the token and the network will be better off, and non-rent seeking tokens, where you remove the token and it doesn’t work,” he said.
Techcrunch also interviewed Morehead:
TC: Regulators seem to be waiting to see what happens with ICOs, but you can imagine them coming in. My understanding is these tokens are being structured as sales of services or products rather than as securities that are subject to certain disclosure and registration requirements. What if something changes?
DM: All these new currencies are along a spectrum and have various attributes, and various regulatory bodies around the world, including the CFTC and the IRS, have taken clear stances on them already. Other agencies haven’t ruled on them, but I think it’ll be the same with token sales, where there will be a period of time where they figure out how they fit into existing regimes or whether new regimes are needed to regulate token sales.
TC: How many startups have you funded so far with this ICO fund, and what’s your investing criteria?
DM: We’ve invested in [the coming ICO of messaging app] Kik, 0x, FunFair, Omise and Civic. We’re also a venture investor in Civic from years ago.
JK: Our preference is protocols where the token is integral to the functioning of service itself — in protocols where tokens are the only exposure to the network.
The fund will be open to private and institutional US-based investors, offering a means for many venture capital firms to participate in the ICO markets that are otherwise unable to directly invest in cryptocurrency projects due to company policies. The company plans to open up to non-US investors in the future.