The cryptocurrency market is experiencing a significant resurgence, prompting AngelList and CoinList to introduce a new approach for raising capital specifically for crypto-focused entrepreneurs through the use of digital currencies.
In an exclusive announcement to TechCrunch on Wednesday, the two companies revealed their collaboration to create specialized crypto investment vehicles, including crypto special purpose vehicles (SPVs) and crypto roll-up vehicles (RUVs).
This partnership aims to provide an avenue for users “to raise funds with syndicates and manage their investments in crypto startups the crypto way.” Syndicates consist of various individuals or companies collaborating on significant financial transactions.
According to AngelList, users will have the ability to finance crypto SPVs using stablecoins, currently at no cost.
“Investors can contribute using USDC, which simplifies the process for crypto participants who do not engage with banks,” stated CoinList CEO Raghav Gulati. USDC refers to a digital dollar, known as a stablecoin, that can be exchanged 1:1 for U.S. dollars, as it is tied to the dollar’s value.
Tokens are set to be distributed to Limited Partners (LPs) in-kind and are compatible with “numerous non-U.S. token issuers and investors.” The companies indicated that an integration with CoinList’s software is “on the horizon.”
“This model is crucial because it allows investors to receive tokens as they become available, rather than cash returns, which resonates with the crypto vision of stakeholder involvement and asset self-ownership,” Gulati explained to TechCrunch.
The crypto roll-up vehicles are intended to amalgamate funds that a founder has secured for a specific investment round. The benefit here, according to the companies, is that startups will not have to “worry about managing compliance for multiple stakeholders” in their early stages.
“Crypto startups frequently aim to onboard numerous angel investors. With RUVs, many angels can efficiently sign documents, transfer funds, and receive consistent reporting via AngelList Crypto RUVs,” Gulati noted.
The mainstream acceptance of cryptocurrencies, where platforms like AngelList operate, faced challenges during the crypto winter, a period marked by a decline in Web3 popularity and legal repercussions for industry leaders like Sam Bankman-Fried and Binance’s Changpeng Zhao.
However, with Bitcoin reaching unprecedented heights and renewed interest from the Trump administration, cryptocurrencies are poised for a revival within broader technology communities.
Compiled by Techarena.au.
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