BitAngels has held a first close on its first structured fund, called BitAngels Fund I, on 10,000 bitcoins. Limited partners in the fund are a private group of high net worth investors who have been affiliated with the BitAngels organization.
The fund, which held its first close on March 31, is focusing on companies that are developing applications based on the same technology that powers bitcoin, but are not necessarily currencies, Michael Terpin, co-founder of BitAngels, told me on the sidelines of the Inside Bitcoins conference Monday. Terpin called this “Bitcoin 2.0.”
“Some of the bitcoin 2.0 applications that have been discussed include using the block chain to regulate escrow or realty sales or eventually to have a stock market,” Terpin said.
The price of bitcoin has been volatile, and recently has been sliding downward. Early Monday the buy price of a bitcoin was $454.91, according to digital wallet Coinbase. At that price, the value of the Fund I is currently at about $4.5 million. BitAngels may raise more capital and have additional closes on the fund, Terpin said.
Unlike more traditional funds, BitAngels Fund I has collected all the commitments up front, and the value of the LPs’ bitcoin commitments are set when they are deployed in an investment, Terpin said. BitAngels wants to deploy the money in 15 to 20 companies, and would like to invest the fund within two years, Terpin said. The fund has not yet deployed capital.
The fund charges a 2 percent management fee and 20 percent carried interest, Terpin said. The key executives on the fund are the three founders of BitAngel: David Johnston, Terpin and Sam Onat Yilmaz as well as Jeremy Kandah.
BitAngels formed last year to invest in bitcoin-related startups, launching with 60 members and growing to 400 members, Terpin said.
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