NEW YORK (Reuters) - Billionaire venture capitalist Tim Draper soon plans to take a step that even he, a long-time bitcoin aficionado, has eschewed to now: buying a new digital currency offered by a technology startup.

Venture capital investor Tim Draper speaks at a panel in Beverly Hills, California August 5, 2015. REUTERS/Danny Moloshok

Draper, an early supporter of bitcoin and its underlying blockchain financial ledger technology, told Reuters in an interview he will for the first time participate in a so-called “initial coin offering” (ICO) of Tezos slated later this month.

Tezos, a new blockchain platform launched by a husband and wife team with extensive Wall Street and in hedge fund backgrounds, will launch the ICO on May 22. Draper will also invest in U.S.-based Dynamic Ledger Solutions Inc, the creator of Tezos, but did not disclose details.

Draper, who scored big as an early backer of Skype and Baidu, becomes the first prominent venture capitalist to openly embrace initial coin offerings. This would be a significant stamp of approval for this new financing mode of blockchain start-ups. Some investors have expressed concern about lack of regulatory oversight for ICOs.

Over the last year, blockchain start-ups have been raising cash by creating and selling their own currencies or tokens in unregulated offerings that bypass banks or venture capital firms as intermediaries. Interest in these deals has been stoked by the run-away performance of the original cyber currency, bitcoin BTC=BTSP, which has surged more than 67 percent in the last six weeks to hit a record high.

“The best thing I can do is lead by example,” said Draper, on his plan to participate in Tezos’ token offering.

“Over time, I actually feel that some of these tokens are going to improve the world, and I want to make sure those tokens get promoted as well. I think Tezos is one of those tokens.”

Most traditional venture capital firms are prohibited by agreements with investors from deploying cash into such high-risk assets as digital currencies.

But Draper said the contract terms with his investors allow investing in pretty much any vehicle.

“I think most investor contracts did not anticipate something like an ICO,” said Draper. “But we did anticipate that certain things are going to happen and finance is going to be transformed.”

Draper said his firm has specifically carved out money for non-traditional investments.

Tezos is similar to bitcoin and other blockchain platforms, but its design allows for decentralized and automated upgrades.

Most software platforms provide for automated updates, but blockchains remain notable exceptions because update procedures are typically centralized. Tezos touts itself as the first blockchain platform to overcome that hurdle.

Tezos was created over a span of three years by Kathleen and Arthur Breitman. Arthur Breitman had worked at the high frequency trading desk at Goldman Sachs and was an options market maker at Morgan Stanley, while Kathleen Breitman is a former management associate at Bridgewater Associates, the world’s largest hedge fund.

Unlike previous ICOs, Kathleen Breitman said Tezos’ deal would not be capped by a set number of tokens to be created.

“What we’re going to do is allow as many people who want to buy into the crowdsale over a two-week period,” she said.