Blockchain Capital, a venture capital firm that invests exclusively in blockchain technology companies, announced Thursday that it plans to raise a new fund by selling a digital token to investors. Each token will represent a fractional ownership in the San Francisco-based firm's new fund.

Known as an initial coin offering, or ICO, this fundraising method is becoming increasingly popular. In 2016, dozens of startups and projects used ICOs to raise a total of $236 million, according to a recent study by CoinDesk.

The call of crypto

Despite this, the method has apparently never been used in the traditional world of Silicon Valley venture capital. Brock Pierce, the managing partner of Blockchain Capital, said in a press release that the new fund is expected to be the first to offer its own digital token.

"We also believe we are democratizing access to an asset class traditionally only available to elite institutional investors,” Pierce said.

Unlike bitcoin, which serves as a kind of digital cash or gold, the tokens distributed through ICOs are like a cross between stocks and currencies. As with many others, Blockchain Capital's token, BCAP, will live on the Ethereum platform and trade on exchanges once the initial offering has ended.

In order not to run afoul of Securities and Exchange Commission rules outlawing the sale of unregistered securities, Blockchain Capital's ICO will be open only to accredited investors in the U.S., defined as those making an annual income of at least $200,000 or who have a net worth exceeding $1 million, Wired reports. In other countries, everyone will be able to get in on the action.

Since opening its doors in 2013, Blockchain Capital has invested in 43 companies, including leading blockchain startups such as Chain, Coinbase, Ripple and Xapo.

The firm plans to release more details about the ICO in an offering memorandum, which is due to be published on April 3.