Pando

Pantera Capital doles out Changetip cash, wins the company fans in the process

By Michael Carney , written on December 3, 2014

From The News Desk

Weeks after ChangeTip seemingly crossed the chasm from niche to mainstream, facilitating micro-payment love across the internet, the company yesterday announced $3.5 million in new funding led by Pantera Capital.

Being a bitcoin-focused fund, Pantera is already different than most VCs, so perhaps it shouldn’t come as a surprise that the firm went a little above and beyond the typical investor behavior when the round was announced. Pantera spent much of yesterday tipping Twitter users who retweeted the company’s announcement of the funding.

Initially, the financial thank yous were just $1 a piece, then $8 each. But eventually, the company dolled out $75 to a single lucky user, Martin Joyce, who was the 300th person to retweet.

For a fund with tens of millions under management, a few hundred dollars spend evangelizing your latest investment is barely a drop in the bucket. But the good will this type of action can engender is nontrivial, and also core to the value proposition of ChangeTip itself.

Plenty of investors write blog posts about their bitcoin – Pantera’s is here – but actually using the product, where possible, to drive viral adoption is far less common.

In an odd way, this scenario reminds me of Shark Tank, which show star Kevin O’Leary has described as “a VC firm on steroids.” All hyperbole aside, and ignoring for a second the made-for-TV drama that comes with all Shark Tank negotiations, where O’Leary is dead on is with respect to Shark Tank’s ability to beam any product it features into the homes of 10 million US households (plus syndication), something no other investment firm can match. The show can also offer an “As Seen on Shark Tank” section in Target stores to any entrepreneur looking for brick and mortar distribution.

Pantera’s reach is modest by comparison – it has just 3,074 Twitter followers as of this morning. But through a little creative promotion, the company created tangible ripple effects that pushed its message out to the follower graphs of the consumers it tipped, not to mention onto the r/Bitcoin subreddit and, likely, other online communities. In this case, a little bit of effort and some spare change from beneath the Tesla seats goes a long way.

Kudos to Pantera, not only for what seems like a savvy bet on the leader in bitcoin micro-payments, but also for quickly adding value beyond the cash it can inject into a business.