Epoch Venture Capital, in its latest report about the Bitcoin ecosystem noted that more startups are incorporating Bitcoin into their financial statements.
Bitcoin, according to the report is becoming a valuable asset as startups seek capital efficiency, protection from dilution, and global positioning.
Moreover, the document illustrates Bitcoin’s impact on a startup’s financial sustainability. A startup raising $1 million at 10% equity with a monthly burn of $20,000 could reduce its future fundraising requirements by 50% if it allocates half its cash towards BTC.
If Bitcoin’s price increases by 30% annually, the company can potentially operate for another five years with no additional funding. The company can continue to operate for five years without additional financing if the price of Bitcoin increases by 30% annually.
Bitcoin is still a significant investment for startup companies with high burn rates. If a company is burning $30k per month and still needs external funding, it could take a full year to raise the next round of financing compared with a US-dollar treasury.
This could result in more equity and a higher value.
Despite Bitcoin’s well-documented volatility, Epoch’s report suggests that downside risk remains manageable. Even when Bitcoin’s price drops by 40% in 2025, a company would need to raise funds only three months earlier than planned, with an additional dilution of just 1.3%.
Marketing Bitcoins
This report highlights four major benefits startups can gain by holding BTC. Three of these are financial in nature: protection against inflation, protection from equity dilution, and the ability to access strategic financing.
The fourth one is marketing. This report revealed that Bitcoin adoption allows businesses to connect with an estimated global network of 400 million crypto-savvy customers who support brands who integrate BTC in their operations.
Case studies featured in Epoch’s report reinforce this narrative. Tahini’s, a Canadian fast-food chain, shifted its entire treasury to BTC amid pandemic-induced financial strain.
After adopting Bitcoin, this company has expanded from three locations to forty-four. This company used Bitcoin to create viral marketing and a 3 million-strong YouTube following.
Real Bedford FC (a British football team owned by Bitcoin enthusiast Peter McCormack) adopted Bitcoin to be its main reserve currency. Since then, the club has built up a large global fan base, acquired high-profile sponsors, and increased revenues through merchandise sales. It outperforms local competition with little exposure.
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