One week after his startup's abrupt closure, Buttercoin CEO Cedric Dahl says the wider community should be careful to learn from his experience at the helm of the US bitcoin marketplace.
He told CoinDesk:
Founded in 2013, Buttercoin raised $1.3m in funding, capital that helped make the startup 'one to watch' in a crowded market. However, in hindsight Dahl wouldn't have tried to raise venture funds at all, he said, calling the decision a "tactical mistake".
"There's much more seed money out there. It's much easier to raise, whereas with venture, if you're not able to get it, the funding is over. With seed and angel money, you can keep going," he continued.
Buttercoin's last full day of operations was 10th April, with employees scheduled to depart at close of business on 15th April.
Supply and demand
In interview, Dahl talked at length about his regret that he didn't bootstrap the company, instead trying to raise "a significant amount" early on.
"What I should've done is really start with a fraction of what I would actually need and once you have enough demand, raise more," Dahl said.
Still, Dahl warned that having traction in the marketplace isn't everything, as he believes Buttercoin was able to achieve an active user base despite opening to the public roughly five months ago.
"At the end of the day, we built a great product that had real growth that was growing between 10–25% per week," Dahl said.
Consolidation to continue
Dahl also discussed the need for bitcoin industry executives to strike a balance between "reality and perception," noting that both are equally important when dealing with potential investors.
"Perception is important," Dahl continued, adding that he expects companies to raise funds without introducing products because of this factor.
The most likely targets for this funding, he suggested, would be first-time bitcoin investors or firms looking to capitalize on the big opportunities in the space. Further, he said that investment is likely to be split between large venture rounds and smaller seed investments, though all in line with an overall trend of consolidation.
Dahl went so far as to predict an environment where the number of bitcoin wallet providers is whittled down to a handful of well-capitalized winners.
"I think that you'll find there's going to be a really big consolidation in the space," he added.
'Moonshot' option on table
Despite the formal announcement, Dahl suggested that he wasn't ruling out a last-minute bid to save the company or secure an exit for investors.
"We're trying to do the best we can by our team and our investors, we're pursuing every option possible to get compensation," he said.
Overall, Dahl expressed his thanks to his team which he commended for handling both the scaling up, and subsequent winding down, of Buttercoin professionally. Going forward, Dahl indicated he would also seek to make himself available as a resource to aspiring bitcoin entrepreneurs.
Caution tape image via Shutterstock
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