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Useful Vids
► Mina Protocol: https://www.youtube.com/watch?v=Zj6rNewnbrw&t
► The Coinbase ‘effect’: https://www.youtube.com/watch?v=GnI8-uxZPEg
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- TIMESTAMPS -
0:00 Intro
2:13 What Are VC’s?
5:09 Mechanics of Crypto Private Sales?
6:33 Private Sales & VC’s
12:12 Bespoke Vesting Schedules
15:26 Are Private Sales Fair?
17:39 Final Thoughts
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️ Useful Links ️
► Understanding VC’s: https://www.investopedia.com/terms/v/venturecapitalist.asp
► Coinbase Ventures invests in Synthetix: https://www.coindesk.com/coinbase-ventures-paradigm-synthetix-defi
► Mina ICO price: https://icodrops.com/coda-protocol/
► Mina funding rounds: https://minaprotocol.com/blog/mina-token-distribution-and-supply
► INJ Binance Research report: https://research.binance.com/en/projects/injective-protocol
► Coinbase Ventures: https://ventures.coinbase.com
► Accredited investors: https://en.wikipedia.org/wiki/Accredited_investor#United_States
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What Are VC’s?
In short, venture capitalists collect pooled investor capital from high-net-worth individuals and deploy it to fund early stage crypto projects. In return, these VC’s secure tokens for investors and in some cases equity.
So, the crypto VC game is one of essentially finding great projects, securing tokens at top prices, earning money for their investors and taking a cut of the profits.
But VCs bring much more than just funding. What many people don’t appreciate is the operational know-how and connections that are brought too.
Mechanics of Crypto Private Sales?
The main reason why private sales are shrouded in so much mystery is that many shitcoins are not so keen to share the details of what happened behind closed doors. Also, most people don’t know where to find private sale information and what to do with it.
In a nutshell, these sales have two main rounds:
► Initial seed round (these have the best token prices)
► Private sale round
That all happens before those IDOs or ICOs you have seen. Sadly, unless you are an accredited investor, then it’s unlikely that you can get into one of these earlier funding rounds.
️ Private Sales & VCs ️
Should regular crypto investors worry about VCs dumping their bags on the market? In a nutshell, the answer is: Not as much as you think.
I’ve looked at projects with publicly available private sale data and a really good one to demonstrate this would be Mina Protocol.
Yes, Mina sold around 75 million tokens to the public at a price of 25 cents (which is around 28% of all available tokens). That may seem like a ton, however, 205 million tokens were sold at private sale.
But here’s the thing. Almost every private sale I have looked at (with publicly available information) has one thing in common: they all have vesting terms attached - which is just a clever way of saying that investors get access to their tokens over time and NOT in one go.
Mina releases pretty much all these tokens in equal portions on a monthly basis. Which means that VCs cannot dump the lot on the market out of the blue.
Bespoke Vesting Schedules
But are all VC allocations in private sales releases linearly? Well, some projects have defined points in time where a portion of those tokens are unlocked. Which could actually add another dimension to your portfolio management.
Imagine if you hold tokens in a project and you know there is a massive VC unlock coming up. There is a chance of these guys selling a bunch of tokens on the market, right?
I explain this and some of the tools you can use to get that information in my vid. So, be sure to watch to learn about that.
Are Private Sales Fair?
Honestly, I am in two minds about this one. On one hand, some VCs are funding projects years before a public sale actually takes place. There are higher risks and those VCs could be bringing a bunch of know-how and connections to the table.
The flipside is that private sales are exclusionary and essentially act as a mechanism to help the rich get richer.
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Disclaimer
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.
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