Bitcoin is like the early Internet, minus the VC money

nybitcoincenter 28 Apr 2014 / Market Watch – Bitcoin is the hottest investing trend since the Internet, according to venture capitalists who have sung its praises. But the money hasn’t exactly followed.

Venture capitalists invested $74.1 million in bitcoin startups across 39 deals in 2013, according to data provided by CB Insights. That’s less than a third of what Internet companies raised in first-round funding in 1995, when Internet leaders like Yahoo, Inc. YHOO +0.06%  and eBay Inc. EBAY -0.95%  were just getting off the ground.

In fact, for all the predictions that bitcoin is on the cusp of blowing up the traditional financial system, investors have largely kept to the sidelines. The last round of funding raised by Oculus VR — the maker of virtual-reality goggles Facebook Inc. FB -3.47%  agreed to acquire last month — was more than all of bitcoin’s VC haul in 2013.

“From an aggregate standpoint, a hundred million bucks in venture is a pittance. It’s a rounding error,” said Matthew Roszak, co-founder of the venture-capital firm SilkRoad Equity. He has a portfolio of 10 bitcoin investments.

Bitcoin funding: Less than biotech, banks

Some industries are likely attracting more funding because they are bigger. Software companies attracted $11 billion in VC funding last year, the most of the industries surveyed, according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association, which uses data from Thomson Reuters. The software industry also attracted the most deals, and when that number is taken into account, the average software investment isn’t among the highest….. Read more

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