Our mission is to create open financial technology with zero-knowledge privacy, for everyone in the world to use. The first application of that technology is Zcash, a cryptocurrency and blockchain with privacy built in.

Stay tuned to this blog to hear more about all of these exciting developments!

We are using the money to hire several awesome new people for our team, to further invest in security assurance such as by hiring independent security auditors , to fund the Zcash Open Source Miner Contest , and to lay plans for several more projects.

This is a huge vote of confidence in the Zcash team and in the value of the Zcash project, and it gives us plenty of cash to assist the upcoming launch of Zcash Sprout .

Today we’re announcing that this past summer we took in a new round of funding. Seventeen investors put in a total of $2 million dollars into the Zcash Electric Coin Company in exchange for equity in the company. The investors in this round are: Aaron Grieshaber, Branson Bollinger, Maple Ventures (Amir Chetrit and Steven Nerayoff), Brian Cartmell, Vlad Zamfir, Roger Ver, Digital Currency Group, Barry Silbert, Charles Songhurst, Fenbushi, Shapeshift, Erik Voorhees, David Lee Kuo Chuen, Fred Ehrsam, Sebastian Serrano, and Li Xiaolai.

Continued transparency

The Zcash Company has always been exceptionally transparent about our backers and our company finances.

But, with this blog post we are radically increasing our transparency, to a degree beyond what is considered normal or even acceptable in Silicon Valley.

We’re doing this in order give the public a clear picture of the incentives we’re operating under, and the “initial conditions” of the Zcash economy that is about to be born.

Pricing In return for $2 million, the new round of investors collectively took ownership of 6.25% of the company.That implies that the new investors were effectively valuing the company at $32 million (at a time when the uncertainties were greater).The overall amount raised including the previous round is $3 million, and the investors collectively now own 16.4% of the company. Since the Founders’ Reward is 2.1 million coins (10% of the total long-run monetary base of 21 million coins), and since the Founders’ Reward will be split among the owners of the Zcash Company in proportion to their ownership, this means the new round of investors paid $2M for an eventual distribution of 131,250 Zcash coins. Therefore, they effectively paid $15.24 per coin. Be aware that the investors received not only a right to an eventual distribution of Zcash coins, but also a permanent share of the Zcash Electric Coin Company, which may prove to have independent value. So you can’t simply say that the investors valued coins at $15.24 a piece. Instead, they might have chosen to invest partly because of the accompanying equity in the company. From my personal experience negotiating with them, there were a variety of attitudes, with the majority of them more interested in the coin than in the company, but a substantial minority the other way around. The investors will receive their share of the Founders’ Reward over the first year of mining. The rest of the founders will receive their share of the Founders’ Reward over the first four years of mining. (This doesn’t change the size of the Founders’ Reward per block — it is still 2.5 ⓩ for the founders and 10 ⓩ for the Miner for each block in the first four years. It just means more of the Founders’ Reward goes to the investors than to the other founders during the first year. See Funding, Incentives, and Governance for why the Founders’ Reward is on this four-year schedule.)

The distribution of Zcash 90% of the Zcash monetary base goes to the miners, to reward them for doing a public service by maintaining a secure global blockchain, that anyone can use, and that can hold validated but private transactions. I urge everyone to run a Zcash miner! It is the easiest thing you can do to support the open, permissionless network and the new economy, and (if you’re lucky) you might also get a Miners Reward for doing it. You can get started today (on the not-real-money-yet testnet) by following the Zcash Mining Guide.