Lightspeed Venture Partners, a Silicon Valley firm known for investing in hit apps like Snapchat, is set to create a crypto-fund, according to people close to the firm, reports Recode. The problem, however, is that it still does not know how to do it.
The company’s interest in digital cryptocurrencies has been varying. If five years ago it was on the forefront of investing into cryptocurrencies, recently observers noticed that its interest started to wane, even though it backed the initial coin offering at Basis, which raised $133 million.
Nonetheless, Lightspeed seems to be back on track. Now, its partner, Aaron Batalion, is leading the company’s effort “to drastically scale up the firm’s activity in the space.”
The company’s spokesman said: “We’ve been making many investments in the fintech space over the past several years, including Affirm, Blockchain, Basis and more that are unannounced. Blockchain-based technologies are a huge area of interest for us, and we have partners focused on this. In terms of a dedicated crypto fund, we have nothing to announce at this time.”
This is where the tricky part kicks in with the company apparently exploring three different ways of setting up the fund.
One option is to simply carve out funds specifically for crypto-investments and then publicize it “similar to how Kleiner Perkins Caufield & Byers set up the iFund to invest in Apple-related projects and Accel set up Big Data Funds to invest in aligned startups.” Lightspeed is allegedly leaning towards this option.
However, there is also a chance that the company will create a new fund altogether just like Andreessen Horowitz, one of the leading venture capital firms when it comes to investing in digital currencies, did. However, this scenario is considered to be highly unlikely.
It could also be the case that Aaron Batalion will choose to step down as the general partner and create an entity of his own. Even though it would not preserve the Lightspeed brand, the company has apparently promised to back it up financially.
Recode also emphasizes that Lightspeed’s struggle to decide how to best create a crypto-fund is typical for many Silicon Valley top-tier firms which are willing to benefit from the technological advances.