Silicon Valley has “disrupted” entire industries in recent years– from transportation and travel to finance and food– but it has not been a fertile funding ground for female founders. Women-led startups made up just 4.94% of all venture deals in 2016, with an average deal size of $4.5 million (versus $10.9 million per deal for male founders), according to research firm PitchBook.

Three women leaders in the booming cryptocurrency industry are choosing to bypass the traditional venture funding route by capitalizing on a new fundraising mechanism known as “token sales” or Initial Coin Offerings (ICOs). These crypto-focused entrepreneurs– Galia Benartzi, co-founder of Bancor, Kathleen Breitman, co-founder and CEO of Tezos, and Crystal Rose, founder and CMO of Sensay– are raising capital for their companies in a new marketplace that’s based on digital currencies like bitcoin and ethereum rather than dollars. So far in 2017, their companies have raised over $385 million, and Sensay’s upcoming ICO at the end of September is expected to raise $30 million.

For those new to the cryptocurrency scene, an ICO is when a company releases its own digital currency, or “tokens” (the digital equivalent of stock shares), with a purpose of funding. The company sells those tokens to its intended audience in exchange for a more “established” form of cryptocurrency, typically bitcoins (BTC) or ether (ETH). As TechCrunch reporter Alex Wilhelm explains in his May 2017 article “WTF is an ICO?”, “You give the ICO bitcoin or ethereum, and you get some of Billy’s New Super Great Coin or the infamous CrunchCoin.”

“Think of an ICO as essentially another term for a crowdsale on steroids,” explains Sensay founder Crystal Rose. “An ICO allows us to extend a shared level of interest in the company to everyone. The way we do that is by letting everyone purchase a shared value on the network, and contribute to it. The value is inside the system and is tradeable and usable among its users, and any platform that wants to build on top of it.”

Unlike traditional methods of fundraising (seed rounds, Series A, B, C venture rounds, etc), ICOs thus far have been held on behalf of technology companies in the cryptocurrency space, and so appeal to investors who are familiar with or already own digital currencies. And the risk is high.

According to Andrew Marshall, a writer who has been following the bitcoin market since 2014, “the price of the issued tokens isn’t backed by anything other than the community’s faith in the development team to release a finished product at some point in the future.” In other words, the token has little to no value until the company’s project is developed, launched and has a community of users.

ICOs Top of Mind at TechCrunch Disrupt SF

Despite the risks, the ICO market is hot. In 2017 to date, there have been 92 ICOs which collectively have raised more than $1.7 billion, according to CoinDesk’s ICO tracker. If you bought $100 of bitcoin 7 years ago, you’d be sitting on $70 million today (See chart).

At this week’s TechCrunch Disrupt conference in San Francisco, cryptocurrency experts, including Ethereum founder Vitalik Buterin, Eyal Hertzog of the Bancor protocol, and Dan Morehead, founder of blockchain investment firm Pantera Capital, took the stage to discuss the “crypto craze” and where it’s heading in the future.

Responding to JP Morgan CEO Jamie Dimon’s comment last week calling bitcoin a “fraud,” Morehead acknowledged that some projects built on bitcoin will fail, but “the ones that are successful– they are going to change the world.”

ICOs pose the potential to shift the investment status quo and provide new fundraising opportunities, especially for female founders, says Jill Richmond, managing partner at ARK ICO Advisors.

“For women and others who have been overlooked by Silicon Valley’s male-dominated venture capital market, ICOs provide a way for investors to financially participate in the early building of startups,” Richmond explains. “The next funders of decentralized economies will likely not be traditional three-piece suit-clad, Ivy League-educated barons of Wall Street, but developers and tech geeks. The next leaders of Silicon Valley may be the women of blockchain tech start-ups.”

On June 12, 2017, Galia Benartzi’s Bancor raised $156 million in ethereum cryptocurrency coin—in just three hours. The company is helmed by Silicon Valley luminaries, including AppCoin alum Eyal Hertzog and Bernard Lietaer, author of New Money for a New World. Benartzi, who has held roles at Mytopia, Particle Code and AppCoin, made waves with her TEDx talk, “The Value Revolution: How Blockchain Will Change Money,” in which she discussed how bitcoin, blockchain and cryptocurrency will revolutionize both moral and monetary values.

Tezos co-founder and CEO Kathleen Breitman led her company in raising $232 million (at current bitcoin and ethereum prices) this past July, the most ever for an ICO to date. According to Breitman and her co-founder/husband, Arthur Breitman, Tezos’ “smart contract” platform is based on moral values such as non-dogmatism, non-aggression, and a democratic and “built-in governance mechanism.”

Crystal Rose’s Sensay has raised $6 million in two funding rounds from traditional VCs, including Norwest Venture Partners, Greycroft and Draper Associates, and is planning an ICO in late September. Sensay’s chatbot uses artificial intelligence to connect people seeking or offering services and expertise. Sensay’s initial goal is to connect people, with future plans to monetize these connections.

“What if every time you gave a recommendation to a friend (or stranger) you earned money? That’s what we’re working on with SENSE (our new Ethereum-based digital token),” explains Rose.