Los Angeles-based TruStory, a stealth-mode startup led by Preethi Kasireddy, has raised $3M in a seed funding round to help vet information on cryptocurrency and other areas.
It’s a huge and growing opportunity. Though regulators around the world are cracking down on cryptocurrency fraud, the number of ICOs has skyrocketed and the funds raised through the mechanism are increasing. According to data collected last month by CoinDesk, ICOs raised $6.3 billion in the first three months of 2018; that’s 118 percent more than projects managed to raise by way of ICOs in all of 2017.
The seed funding was led by True Ventures, and also included Pantera Capital, Kindred Ventures, Homebrew, Coinbase Ventures, Wonder Ventures, Abstract Ventures, Dream Machine, along with angels.
Kasireddy–who previously worked at Goldman Sachs and Andreessen Horowitz–left Silicon Valley for Los Angeles last year, saying that Silicon Valley has a “group think” problem, and after noticing that Silicon Valley isn’t the center of Blockchain. Kasireddy also cited LA’s weather, diversity, and “the hustle” in Los Angeles for her
Kasireddy says TruStory will use the wisdom of crowds — including scientists and researchers whom she is currently lining up — to evaluate whether a project or person is legitimate. They won’t be doing this out of their own beneficence. When someone successfully validates a claim or else identifies aspects of an offering that doesn’t make sense, she or he will “earn tokens and reputation and influence” for their efforts, Kasireddy explains.
If they’re dishonest, they’ll lose on all three fronts. (The tokens are generated using the protocol itself, she says.)
Eventually, says Kasireddy, the platform will be used to validate far more than white papers. “We’re starting with crypto market and claims being made in white papers and websites and building a network to help investors and researchers who need this information to make the right decisions.” But there are “other ways to use the same incentive design to validate other claims,” she says.
There will also be opportunities for people to buy tokens to have projects vetted, she adds, saying to “think about Facebook or Twitter” where there are plenty of claims of dubious origin that stakeholders might want to see either validated or debunked.
Asked when TruStory will actively start reviewing what’s out there already, Kasireddy suggests the outfit isn’t ready for prime time quite yet. TruStory is currently run solely by Kasireddy, who is in the process of bringing aboard a couple of operations people and a few key engineers. But she says that unlike many other founders in today’s market — including those who’ve raised venture capital — she’s not interested in orchestrating an ICO to supercharge her company or her hiring plans.
“We’ll fund ourselves through the development of our tokens, and we expect the tokens eventually to fund the business.
“It’s about getting those token economics to work,” she says. “And then the engine starts up.”