based on the materials of the site - By ETHNews
The venture firm Ego Death Capital successfully raised $100 million for its second fund. These investments are directed towards software startups operating on the bitcoin network.
Unlike many other crypto funds that specialize in speculative digital tokens, Ego Death Capital seeks to support real companies solving real problems and generating real income, often in bitcoin itself.
Focus on sustainable bitcoin-related business
Ego Death Capital's strategy is to support companies with annual revenues between $1 million and $3 million, particularly those whose growth is constrained more by a lack of capital than by a lack of market demand. While the primary focus is on Series A funding rounds, a smaller portion of the fund is allocated for promising early-stage investments.
Niko Lechuga, co-founder of Ego Death Capital, emphasized that the bitcoin-oriented sector has long needed a leading investor for Series A rounds, and his company now aims to fill that gap. The fund is primarily supported by family businesses that already own bitcoins and seek to promote the development of the ecosystem around them.
Ego Death Capital has already invested in companies such as Roxom (bitcoin exchange), Relai (savings app), and Breez (payment platform built on the Lightning Network), which is a second layer of the bitcoin network providing faster and cheaper transactions.
The company deliberately avoids investments in companies that produce equipment, mine bitcoins, or large-scale bitcoin infrastructure projects, preferring to focus exclusively on scalable software companies.
Lechuga believes that creating a profitable business based on bitcoins can yield greater profits than simply holding bitcoins, especially when these startups earn income directly in bitcoins. He emphasized, 'We view bitcoin as the only decentralized and reliable foundation for growth.' With this new fund, Ego Death Capital is betting on a more mature, application-oriented bitcoin economy based on solid business principles rather than speculative hype.
However, concerns are growing regarding the long-term sustainability of the trend to use bitcoins as treasury bonds, where companies hold bitcoins in their corporate reserves. James Check, lead analyst at Glassnode, recently expressed concern that the easy profits from this strategy may run out for new companies.
Matthew Sigel from VanEck also raised similar questions, particularly about how issuing new shares to purchase bitcoins could dilute value for existing shareholders if the company's share price approaches too closely to its value in bitcoins.
These concerns are exacerbated by a class-action lawsuit filed by the New York law firm Pomerantz LLP against Strategy (formerly MicroStrategy), a company known for its large bitcoin assets. The lawsuit alleges that Strategy misled investors regarding the profitability and risks of its bitcoin investment approach.
These events indicate a growing attention and changing understanding of the role of bitcoin in corporate finance.
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