500 Startups, a California-based seed accelerator, has reported it is funding five startups giving each of them $100,000.
The bitcoin companies are members of 500’s Batch 9 group, with 30 total companies going through four months accelerating program that helps them build a business idea.
Sean Percival, who operates the incubator for this 500’s batch, says, the money will allow the bitcoin startups to really concentrate on product:
“$100,000 for these companies is going to go a long way. For some of them it actually provides them a year of runway, so they don’t have to go raise money and they can really prove the product out.”
Building Bitcoin Businesses
Apart from the $100,000 in funding the bitcoin startups will receive mentorship from 500 Startups program. The mentors will be the experts within the industry.
“I’m looking to bring in thought leaders in bitcoin that can help them, and to help them find the right investors,” said Mr. Percival, ”because there’s not many of them.”
Sean Percival believes that, there is only a small number of investors in Silicon Valley that are interested in bitcoin, due to the fact that the total available market isn’t very large so far: “Consumer adoption is very low right now, and it’s not growing at the pace it probably needs to.”
Another reason why 500 Startups is giving such a large amount of money is because it understands the cost of hiring software developer talent in Northern California.
Mr. Percival says that most startups need help of software expertises while building their companies: “In most cases, they need to hire developers. And developers are costly. With that money, it’s not just one guy in a corner trying to make it work.”
The Bitcoin Job Fair being held next month is one of the ways to find talent in the area.
Currently there are three more Silicon Valley accelerator programs that are funding bitcoin companies.
Boost VC, a San Mateo-based accelerator has had the largest number of bitcoin-based startups in its program and also has announced plans on funding 100 more companies in the next three years.
Plug and Play Technology Center in Sunnyvale is also dealing with bitcoin startups. CrossCoin Ventures in downtown San Francisco is also planning to move toward virtual currency companies.
500 Startups’ program include the following five companies:
- GoGoCoin – a prepaid access company that sells bitcoin in gift card form providing an easy way for customers to obtain their first BTC;
- Bonifide.io – anonymous transaction ratings for people that builds up a reputation score;
- Coinalytics – provides its users with a real time analytic tool for Bitcoin.
- Neuroware – HTML5 bitcoin wallet;
- Monetsu – focused on payment processing.
Bitcoin is the main focus for each of these companies. Mr. Percival mentioned: “I’m mostly focused on bitcoin. I’m interested in some of the other things going on, the altcoins. But all of the companies are focused on bitcoin.”