Despite accruing an impressive list of investors, including Google Ventures, Centralway Ventures and Y Combinator, Dahl suggested that it was Buttercoin‘s affiliation with larger investment firms that ultimately left it less able to adapt in a changing bitcoin ecosystem.
He told CoinDesk:
“The big lesson is that you cannot rely on venture. You have to make a product that is self sustaining.”
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.
Since the move, some of the company’s more high-profile customers have already reported switching marketplace providers, with MegaBigPower’s Dave Carlson entering a business relationship