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The essence of foam is also beer, only you can’t drink it too fast, you have to take your time. In the era of blockchain and ICO, consumers and investors were integrated together for the first time in history, and consumers became investors at the same time, but the combination of the two states was also natural, and the core was to let early consumers experience the monetary return of product growth, with consumers as the first attribute and investors as the second attribute. But now deformed, most of the investors involved in the ICO, missing the first attribute of “consumer”, it is inevitable that the breakout.
Now the chaos can not be blamed on the investors, because investors are always profit-seeking, where the money will go. Most of the entrepreneurs are lazy, because when the market is frenzied, private placement comes too easily, so they don’t want to do public offering. But if you don’t do public offerings, how will real consumers know about your products and services, much less come to “consume” your products and services. If no one consumes, there will be no buying on the exchange.
and early participation in the private investors, they do not have the first attribute of consumers, holding chips only one purpose, is the high point to throw profit away. Who will sell to in the future? If no one buys, then it is bound to break and cut the meat away. This time left a field of chicken feathers or need entrepreneurs through the “public offering” behavior to solve.
In the era of blockchain ICO, the essence of public offering is “marketing front”, “product pre-purchase meeting”. A global roadshow is not supposed to be called a roadshow. The essence of a roadshow is to sell securities to investors; today’s blockchain ICO public offering is essentially selling a small portion of product futures, accepting orders (and not really taking money), and then allocating futures quotas (Allocation) before the product demo goes live.
1. the essence of ICO is a public offering instead of private placement
2. the essence of ICO is to pre-sell the right to use the product
3. the essence of ICO is to let startups directly listed
These are the three essences of ICO, if you can not deeply understand these three points on the rash All in blockchain, rashly ICO, will definitely go into a track that is bound to fall below the issue price. No matter how glorious the past, when we enter a new world, because of the knowledge of the old world and resources, a moment is not to make the effort.
If you see through these three essentials of ICO, I believe you will come to the same conclusion and new action agenda as I did:
First, resolutely go to sea and register investment institutions overseas
This is easy to understand, in principle, all ICO foundations or BVI companies, will not target Chinese To participate in the investment, through the project KYC real name authentication, must have an overseas identity or the main body of the investment institution.
Second, before the policy is not clear, do not invest in Chinese offshore companies
This is not difficult to understand, because the Chinese team that just went overseas, there is no accumulation in overseas, the user in the country, the brand in the country, the team most of the time also in the country. They can’t make efforts overseas and need a longer adaptation period. At this time, many blockchain teams native to the United States and Europe, the original accumulated brand and users are naturally overseas, which is their natural advantage.
Even for those Chinese in Silicon Valley and Europe, they have an advantage over these very good Series B and C entrepreneurs in the territory itself, and for the first time, the resources accumulated overseas exceed the accumulation of China as a large market in terms of value. I believe that China’s regulatory policy on blockchain ICOs will definitely be introduced and gradually improved, but before the policy is clear, when ICOs are still simply categorized as illegal fundraising, I have to temporarily abandon ICO investments by Chinese teams.
Third, forget about private placement, ICO only two rounds: angel + public offering
This is also the advice for the ICO team outside of China. First take a round of angels, get start-up capital, this part of the money to solve two major problems: beta development funding and the cost of global roadshows (marketing). The angel round of $2 million or the equivalent in BTC/ETH is sufficient, the public offering part of $8 million, a total of $10 million, corresponding to 20% to 50% of the Token circulation. In other words, the overall public offering pricing valuation is better between $20 million and $50 million.
Many ICO founders may feel that the $50 million valuation limits them from raising more money and wastes a great opportunity to raise money. In fact, this is not the case, many people only see the ICO to raise money easily, did not see the difficulty of Token value operation.
Fourth, ICO is not a shortcut but a responsibility, the public offering is only the starting point
After raising $10 million in BTC/ETH through the public offering, everything has just begun. The biggest test is how to use the money well, develop products and promote services, and finally achieve multiple wins for the team, angel investors, public offering investors (consumers), exchange investors (consumers) and all future partners and consumers.
Tencent’s stock has been rising, not because Ma Huateng himself made the market to pull the plate (the so-called sitting banker), but because a large number of users willingly spend money to consume Tencent’s games and contribute profits to Tencent. The only purpose of sitting on the banker is to cut leeks, which is never to be. When you come out to mix, you always have to pay back. If you want your Token in the long term has been up, the core means is to develop products with white paper descriptions, consumers really spend money to use your products, consume your Token (Token back to the Foundation or BVI company account), just like Ether such public chain Coins, are GAS will be consumed. To earn back the Tokens you pre-sold out, that is the basic goal.
usWe all know that it takes time to develop a product, and in a short time the product is not online, but your Token is already traded on the exchange, how to maintain the value of your coin? At this time, you can only rely on “selling dreams to potential users”, which in the end is the marketing front, so that a large number of users buy in advance, and constantly form a buying plate. This process is a series of marketing promotion, combined with the product of each time Lee cost. So many ICO projects have to announce their development progress every week on Telegram, Beechat or social media, and any good news should be put out first for the community to know and for consumers to see, so that on the one hand they have firm confidence in holding Token and not throwing it away, and on the other hand more people will be optimistic and buy or add to their positions to continuously create buying.
Of course, this poses a big challenge to the PR and marketing capabilities of ICO founders. No way, this new era, the ability of entrepreneurs really need to improve, will only bury their heads in the work will not marketing and promotion of the founder, may have to find the right partner to make up. Because the essence of ICO is public offering, the essence of public offering is marketing front, is the pre-sale of product usage rights. The previous fundraising to face a few institutional investors to understand the advantages of technology may get the money, but now you have to face a large number of white consumers to speak of your advantages and features, the way and method is certainly different, the founder’s ability requirements have also changed.
If the founding team’s marketing ability is very poor or product development requires a longer cycle, the effect of public offering is not ideal or does not last that long, how to do? This time, I think it is necessary to bring in market makers to help, this is the cost and cost, but also a necessity. The market maker on the one hand to provide liquidity, on the other hand, also to protect the plate. If there are too many private placements, each investment institution is too concentrated in the hands of chips, basically it is impossible to protect the disk, unless all lock coins, but lock coins also have to unlock the day, these private institutions are eventually to take profits away.
If it is not sold to a large number of real users, then it can only be sold back to the team. Looked at this way, early private placements really become usurious. Unless your tenure falls below the issue price, in this case, back then these squeeze to you to give the quota, to invest in your private investment institutions may not give you a good look. Just think, can you afford it?
Considering the pressure of the breakout, as well as the future cost of their own buyback, the issue price can not be set too high, in the product really began to profit (earn back Token) before, all the angels, private and public ETH, BTC are “borrowed”, are to be returned. As the saying goes, there is no free lunch in the world, you have to weigh your future “repayment ability”.
Unless you are here to cut the leeks, but this kind of project is definitely not something I want to participate in, and I can’t afford to accompany people to cut the leeks of karma. Now the bigwigs in the cryptocurrency world are making a lot of money, but what many people are collecting is not an IQ tax, it’s a greed tax. They themselves may not realize that they will one day pay the same tax, possibly in a different way.
V. Qualified public offerings should have 10 times the excess intent
The 10 times figure is inspired by the ICO of the ArcBlock project we invested in Silicon Valley, although their public offering was only 12,500 ETH, but the total amount of investment intent submitted by the actual white list of registrants was 1 million ETH. for For this type of project, early investors will not have to worry about the lack of buy-in in the later stages. The team did an adequate public roadshow to send the right message to potential future users and reaped the recognition of consumers, who voted with their money.
Many exchanges also have some hard requirements for Token applications on the shelf, such as the Telegram group requires 20,000 people, which are indicators of the size and maturity of the community. 10 times oversubscription represents a qualified marketing front, which can accumulate a large enough buying disk for the secondary market to cover the early angel investors’ profitable retreat, and also prevent The chips are too concentrated in a few private hands. In the future, when they sell off are real smash. If the chips are extremely dispersed, it also avoids the possibility of being smashed, and it is very difficult for potential consumers scattered around the world to combine to smash the market unless the company really has a major accident.
So my advice to overseas good blockchain team ICO is to first set a good proportion of the circulation plate, and then 20% do angel, 80% do public, not private. After 20% of the angels get it, while doing development, while doing global roadshows, online and offline marketing go hand in hand, collect Token purchase intention, backend review and filter out the real target consumers (investors), then after reaching 10 times oversubscription, with the timing of the product demo online open public offering, the chips are dispersed to 10 times the purchasers, each within 10 ETH quota, the unsatisfied consumers will naturally go to the exchange to buy after the opening.
For a quality Token, there will definitely be more than 10 times the return, so it does not matter if the exchange is more expensive to buy. It is actually a better strategy not to covet early discounts, but to buy directly on the first-tier exchange after the shelf at a high price. Because there is still too much uncertainty in the primary market.
Six, one or two links, even to the secondary market as the main position
ICO can be simply understood as a compressed time cycle and money costs of IPO, directly crowded out the private link, from the angel directly to the public offering, to the exchange. So the next link of angel investment is the exchange. For the angel round has seen but the heart is not sure of the project, before we can wait until the PreA and then enter at a premium, and today there is no PreA opportunity, the next round will see in the exchange. So angel investors also want to organize secondary market funds, in the secondary market to buy once missed good projects.
The secondary markets of digital asset exchanges and stock exchanges are both secondary markets with a high degree of liquidity, but there is still a significant difference in nature. This is because stocks on stock exchanges have a lot of information to disclose, such as financial statements. Whereas projects on digital asset exchanges are essentially still start-ups, with imperfect information and difficult to read financial statements, they are still more suitable for early stage investors to judge. Or rather, early stage investors finally have the opportunity to play a certain advantage in the secondary market.
In addition, the angel round of the ICO, although there are discounts, but also will lock the coin, the liquidity is much worse compared to the secondary market, the chip lock will also have some opportunity cost, resulting in some missed opportunities to operate the short wave. So even if you angel round invested in the project, continue to buy in the secondary market, is also a good profit opportunity. It can also incidentally help the team to do market value maintenance and provide liquidity, after all, we work side by side with the team and know the roots better. When there is wind in the market, or competitors malicious black PR, it highlights the need for secondary market market capitalization management to control the large fluctuations in coin prices.
A quality Token should have its own normal and reasonable growth rate and trajectory, too fast and too slow are not good, and the surge and plunge will affect the normal development of the project. Just like Jacky Cheung’s concert, if scalpers hype the ticket price to the sky, then early to buy tickets really want to see the concert of those fans, may also be shaken, sell the tickets have been ten times the premium, go home to watch TV, and finally the concert of few people. The project of putting the cart before the horse, eventually someone will definitely become a loser (cut leeks), and will not become the blockchain era of Tencent, Alibaba, Google, Facebook or Amazon. will only become a short-lived meteor in history, become a money-making tool for speculators, and finally leave the team to be blamed (and even spit on and chased by leeks).
The management of the secondary market is very important, can not plummet, and can not soar, one step at a time to sleep solid.
Seven, the focus in 2018 or public chain, protocol layer and infrastructure investment
Now blockchain projects are varied, all walks of life have come to issue Token. But I found that most of them are still speculative concepts and hot spots. There are very few projects that really meet the essence of blockchain. After all, blockchain is a cognitive revolution, and many people’s cognition has not yet caught up, so the products they design must be very lame. In addition, the infrastructure is still stuck in the era of DOS and dial-up Internet, the experience is very poor and cannot support the experience of large-scale and highly concurrent DAPP applications, all these are still to be improved.
So I think 2018 is still the year of infrastructure, we look forward to the launch of blockchain 3.0 infrastructure represented by EOS, look forward to decentralized exchanges, look forward to cross-chain protocols, look forward to better wallets, look forward to more blockchain talents, and look forward to a lot of Old money entering the blockchain industry. But the immediate focus is still on fixing the infrastructure.
And from the business model, the public chain and protocol layer Tokens are essentially ecological coins that can be categorized as Coins just like Bitcoin, etc. The standard for measuring their value is the same as measuring a country, and they are the de facto digital kingdom with a strictly constant total amount of Currency, called CryptoCurrency. As more immigrants and entrepreneurs enter, their Coins will naturally rise in value, and eventually their gross blockchain product (similar to GDP) is going to converge to the same value as the circulating Coins. That’s why founders of public chains also have to have ecological leadership, community leadership, just like national leaders.
To measure a country, we first look at the system, then look at the leaders, and only then look at the technology; to measure a public chain is similar, first look at the consensus mechanism, then look at the team leaders, and then look at the technical strength. Because the first two are available, technology can be supplemented by community power. This has basically been the consensus of the blockchain investment circle.
Leadership is crucial because the fourth essence of ICO is: selling dreams! Don’t be lazy, all the online and offline roadshows, all the meet ups, none of them are missing. Don’t think you can get 10,000 ETH with a phone call to private equity, and think about skipping 10 offline presentations. If you want to be lazy, don’t start a business, and don’t start a business in the blockchain world, because you don’t deserve it, think about it, right?