Lightspeed Ventures May Launch a Dedicated Cryptocurrency Fund

Menlo Park-based venture capital firm, Lightspeed Ventures Partners, reportedly raised over one billion dollars for entering multiple sectors, including the nascent cryptocurrency and blockchain market.

According to Reuters, on July 10, 2018, Lightspeed plans to allocate roughly $1.05 billion to various early-stage companies.

Although Lightspeed was founded in 2000, it monopolized the limelight in 2018 after a $485,000 seed financing in Snap Inc. turned into billions of dollars after the latter's IPO. This follows Lightspeed's investment strategy, which typically funds small to medium scale enterprises where the possibility of an enormous return is high.

While a digital asset venture may never go public, Lightspeed is prepared to invest repeatedly over an extended period to ensure a significant ownership stake, ensuring huge profits when the company is sold or conducts an Initial Coin Offering.

According to data collected by Reuters, companies with a vested interest in Lightspeed have conducted about 17 IPOs during the last five years.

In May 2018, Recode confirmed that Lightspeed was considering three structures for a potential cryptocurrency bifurcation.

The first is a "Carve-out," in which the venture firm branches out investments and profits from their existing money and publicizes the holdings for cryptocurrency businesses.

The second option involves Lightspeed starting a new fund- separate from their existing business, with the same partners but a different strategy and legal structure.

This model is similar to Andreessen Horowitz's recently launched cryptocurrency fund.

Lastly, a "Spinout" model, in which one or more Lightspeed partners set up their personal cryptocurrency funds as wholly-separate entities without carrying the brand name.