For VC firms, promising early-stage investments and successful equity exits are keys to success. But in between high-quality investment opportunities, capital sits idle in traditional financial accounts or earns low returns in treasuries or other cash equivalents.
Many VCs are already familiar with cryptocurrency, making contributions to governance and development in exchange for protocol tokens that could potentially one day be associated with valuable projects.
In the case of idle investment capital (‘dry powder’) or simply for day-to-day operational capital requirements, neither crypto tokens nor traditional shares in early-stage startups offer the necessary liquidity or price stability.
Many general partners are looking for the best way to allocate idle cash and take advantage of opportunities in the crypto markets. However, existing institutional crypto investment programs require investors to take on risk of volatile crypto prices, with returns denominated in crypto that can also vary substantially and be difficult or impossible to predict.
The Circle Yield* Option
As of November 17, 2022, Circle Yield is not accepting new loans. We are evaluating future updates to the program.
Circle Yield offers a new solution for VC funds, with fixed-rate** investments of USD Coin (USDC) that deliver superior returns compared to traditional savings or money market accounts. Investment terms range from one to twelve months, making it easy to know when funds will become available to deploy into the next promising startup idea.
Using USDC for Circle Yield investments is also a great way to get started with the world’s fastest-growing dollar digital currency. As the crypto ecosystem continues to expand and new startups seek funding, attributes like near-instant settlement almost anywhere in the world make USDC an attractive means of getting into deals quickly and efficiently, no matter where they originate.
Investments in Circle Yield are also fully secured and overcollateralized with Bitcoin collateral, a level of protection not offered by other institutional investment programs in the industry. And since investments use USDC, funds aren’t subject to the price swings common to crypto assets like Bitcoin and Ethereum.
VCs need a stable place to invest capital while finding the next big thing. Circle Yield, powered by crypto capital markets, is the best way to earn from crypto activity while having funds in the care of regulated, leading financial institutions in the blockchain industry.
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* Offering subject to business approval, geographical availability***, and regulatory authorization, and there is no guarantee that the product will become available in a specific timeframe or to a specific customer or geography. Circle Yield product offered through Circle International Bermuda Limited (“Circle Bermuda”). Circle Bermuda has entered into lending arrangements with one or more institutional borrowers, including Genesis Global Capital, LLC****. These lenders pledge and transfer Bitcoin into custody with a third party custodian as collateral for their USDC borrowings and Circle Yield investors benefit from a security interest in Circle Bermuda’s security interest in the pledged Bitcoin.
Circle Account and money transmission services are provided by Circle Internet Financial, LLC. Circle Internet Financial, LLC, NMLS # 1201441, is a licensed provider of money transmission services. A full list of Circle’s licenses can be found here.
Circle is not a bank; your Circle Account is not a bank account, and any funds are not insured by the Federal Deposit Insurance Corporation, the Securities Investor Protection Corporation or by any US or foreign government agency, insurance fund, person or entity. For investors in the United States, investments described in this communication are offered by Circle Bermuda to “accredited investors” only in accordance with Regulation D, Rule 506(c) of the Securities Action of 1933, as amended. While Circle Bermuda is regulated by the Bermuda Monetary Authority for digital asset business, Circle Bermuda is not engaged in banking and deposit taking activities and is not regulated for these purposes. You should carefully conduct your own investigations and analyses in connection with any participation in this product, including its objectives, risk factors, fees and expenses and the information set forth in these materials. All prospective participants in the products described herein are advised to consult with their legal, accounting and tax advisers regarding any potential participation. Please read the offering documents carefully before you invest. Additional information is available upon request.
**Rates are purely indicative and are subject to change pending availability, approval and market conditions.
*** Not currently available in the following U.S. states: Alaska, Minnesota, New York and Hawaii.
****Learn more about Genesis Global Capital, LLC here.
