Summary:
Sequoia Capital has proposed the formation of a nearly $600 million cryptocurrency-focused fund. Sequoia Capital is an American venture capital firm that mostly invests in the technology sector. Before introducing the new cryptocurrency fund, the company undertook significant structural adjustments. Cryptocurrency funds would be one of the firm’s three new sub-funds.
Details:
Sequoia Capital has announced the figure of a nearly $600 million cryptocurrency-focused fund. Sequoia Capital is an American venture capital firm that mostly invests in the technology sector. According to Sequoia Partner Shaun Maguire, bitcoin is a megatrend for the next 20 years and the future of money. Sequoia’s latest effort, the creation of an independent crypto fund, departs from the firm’s 50-year legacy. Throughout this time, it never established a specialised sector fund.
Before introducing the new cryptocurrency fund, the Capital business underwent significant structural modifications. According to Bloomberg, the modifications would provide the business more freedom to maintain holdings in public firms and the ability to work around laws that limit venture investments in cryptocurrency to just 20% of a fund.
Goals and Objectives:
The firm’s goals and objectives for developing bitcoin funds are as follows: Cryptocurrency funds would be one of the firm’s three new sub-funds, operating under the Sequoia Capital Fund umbrella. Rather than additional money, the new funds will employ cash previously pledged by Sequoia’s current limited partners. The firm’s limited partners, which include university endowments and pension funds, also support the reforms, opting to roll 95% of qualifying balances into the firm’s new structure. These limited partners have the authority to direct the distribution of their contributions to one or more of the sub-funds.
Along with the cryptocurrency investment vehicle, other smaller funds have been established. Sequoia’s Ecosystem Fund and Expansion Fund are examples. The Ecosystem Fund, which will focus on Sequoia-connected startups and where the company will delegate third-party investors (including founders and other venture firms) to make investments on its behalf, will receive around $950 million. The Expansion Fund will receive $3.5 billion and will invest in growth-stage enterprises in the United States and Europe. Both the Ecosystem and Expansion funds will invest in a variety of technologies, including cryptocurrency.
Credits: www.timesofindia.indiantimes.com