Anyone who’s anyone in tech today knows the three-letter acronym for jumbo-size fundraising: ICO.
The legality of Initial Coin Offerings, specifically, the public sale of digital tokens that sit on the Blockchain, is still something the SEC is sitting on the fence over. As such, most sales are restricted to non-US residents.
But in many countries, it’s fast becoming anathema to crowdfund practically everything from the basement start-up to mobile middleware up to the decentralised bank. According to Smith & Crown, a digital assets research firm, so far start-ups have raised over $600m in 2017, making crowdfunded campaigns more popular a source of pre-revenue financing than traditional venture capital equity for the first time in history.
While most of the ICO crowd traditionally come from the set of lots of style, lofty ambitions and little substance, lately there are signs some of that has begun to change lately. MobileGo, a cell phone provider in Asia, raised $35m in May. While decentralised financial institution Bancor’s $100 million raise was a little more circumspect, respectable companies like Kik plan to utilize the power of their networks to create their own unit of virtual currency later this year.
The latest widely-tipped red hot ICO, and the one that experts are billing as a potential catalyst for the scene to mature into a serious marketplace of its own is tipped a little more towards the quantitative side things – it’s a decentralised hedge fund, with a typically tokenish name: Monkey Capital.
What strikes you about Monkey Capital as somewhat standing apart from the crowd is the experience and genuinely impressive line-up of the management team. For once, this is a Crypto offering worthy of something that could fill a public company Boardroom. From the offering’s partners Daniel M. Harrison and Darshan Vyas, both investment professionals, and Marcelo Garcia-Casil, an ex-Barclays fintech entrepreneur, the list doesn’t draw for breath.
Seth Shapiro, a two-time Emmy Award Winner and a Governor of the TV Academy as well as an adjunct professor at UCL, a smattering of the most senior venture capital guys in the world and the founder of PeerAssets, a sort of combination between the Bitcoin and Ethereum protocols make up the weightier part of the Advisory Panel, while senior banking compliance officers, legal representatives and other leading lights from the financial and tech worlds adorn the impressive 25-person line-up.
Monkey Capital’s ICO, like all token listings, starts with a website and a White Paper. Except unlike the marketing brochures that most of these so-called White Papers are in reality nothing other than in sum, the fund manager’s actually might pass for a Harvard Business School PhD thesis. It’s detailed, explanatory, challenging and tackles with complex and ambiguous issues such as how to ensure fairness in a game where only one party holds all the cards. Monkey Capital’s solution, which stems around splitting up voting and non-voting shares and positioning itself as the mere recipient of dividends but not the fund’s day to day administrative manager, is effectively like putting a croupier between the player and the table. It’s tidy, smart and genuinely innovative.
The ICO doesn’t just begin and end at the company’s website, however. Coinschedule, a site that carries out due diligence on potential offerings and picks the best 10 or 20 out of more than a thousand monthly applicants, has given Monkey Capital its first ever Platinum accreditation.
“Monkey Capital has all the key elements of a successful crypto project: a bold but realistic plan, strong team with a delivery track record and transparency in terms of who they are and how they plan to deliver results,” Alex Michaelis, co-founder of Coinschedule.com said in an e-mail response to questions about the Monkey Capital platinum listing status. “We at Coinschedule have been waiting for the right partner to offer the first Platinum level sponsorship and after meeting Daniel and Monkey Capital it became clear that they were the ideal project.”
As if all that wasn’t enough, the fledgling hedge fund aims to invest in Spacex contracts, buy up digital assets while investing in their underlying networks and see Ethereum-style returns and even, according to the company itself, to engage in hostile takeovers over public companies, “generating profits by engaging in creative destruction.”
The hyperbolic vernacular is typical of the offering’s founder, Daniel M. Harrison. Harrison is a global digital asset celebrity of sorts (in the financial scheme of things) who famously predicted that Bitcoin would reach $2400 mid-way through this year back in 2014, when it was still only $300 or so a coin and mired in ridicule as a dead asset.
Wage into the foyer – which is to say, the general channel – of the company’s Slack Chat most times of the day or night and you will find Harrison breathlessly berating would-be investors for giving him innocuous and well-meaning advice about the pace of the ICO, or otherwise discussing mind-boggling equations or such issues of contemporaneous import as South Asia’s Crypto community with Peerchemist, a pseudonymous early Blockchain developer and yet another of the offering’s all-star line up. Peerchemist holds significant sway among the Crypto community, which is no small feat in what is now a hub in excess of a $100m in value.
Harrison doesn’t hold back at all on advertising his magus opus. Here is a typical post of his in the ICO’s Slack:
“The other thing I want to mention here is the investors we have who are e mailing for a "better deal" by investing early stage. There is only one group who qualifies for that category and they invested last year (about $2m; we will announce this officially prior to the ICO; NONE of them are management and ALL are passive, non-influential private persons). For everyone else it's the same terms. No special treatment at all. When you have the iphone in the palm of your hand you are not really that focused on hype, branding, marketing, selling it - you have teams of people offering to do it for you anyway. We are a bit like that; we just wanna know how to make it even better than it is.”
While waging war on social media-bound growth hackers (“I don’t give a f**k about marketing!”) to accusatory recitals of why Bitcoin crashed back in 2014 (“It was the –f**cking [Bitcoin] Foundation and its stupid politicking that did it”, Harrison’s unusual blend of Upper Class Anglo-cosmopolitan aplomb and working class expletive-clad New Jersey turnpike vernacular is some of the best bits of the whole show.
And a show it is. Like any big event, Monkey Capital’s ICO seems to be showing us in some way how finance can be both engaging and highly entertaining. And if predictions are anything to go by, incredibly profitable too: chat rooms already have the offering pegged to raise a billion dollars or more, becoming the first ever 10-digit sum raised in a crowdfunding campaign.
I asked Harrison whether he thought that was likely or not. Seconds later, I got a typically tongue in cheek response back in my inbox: “What? You mean it’s going to be a billion dollar baboon?! Honestly … I have no idea.”
Somehow though, I get the feeling a lot of people do.