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Cryptocurrency News Articles
The Renaissance of ICOs: CoinList, Legion, and Echo
Jan 19, 2025 at 10:35 pm
The strong return of ICOs (Initial Coin Offerings) is greatly beneficial for the crypto space and lays a stronger foundation for token holders in this cycle.
The return of ICOs (Initial Coin Offerings) is a boon for the crypto space and strengthens the foundation for token holders in this cycle.
The story begins in 2010 when Naval, a prominent investor, saw an opportunity to involve retail investors in venture capital and democratize the asset class.
He launched AngelList, and by 2013, the platform had helped startups raise over $200 million.
AngelList's first product was an email list (hence the name) that connected startups with investors.
This may sound silly and basic, but Naval was already highly influential in Silicon Valley, and several companies, including Uber, raised funds through this email list.
In 2014, AngelList launched Syndicates, which was a turning point.
Syndicates shifted AngelList from a platform-centric investor model to a lead investor-centric model.
Remember this distinction; it will be important later.
Due to adverse selection, equity crowdfunding never found PMF (Product-Market Fit) ------ why would a great startup that can raise funds from VCs want to raise funds from a random platform?
(Note: Adverse selection refers to a situation where one party has information advantages, leading the less informed party to make incorrect choices before a transaction occurs.)
Syndicates completely overturned this idea by concentrating investments on a primary investor rather than on AngelList itself.
Syndicates provided leverage for angel investors who had deal experience but not necessarily capital.
For example, John Smith is a very influential marketer that startup founders want to work with, but he lacks funds.
John Smith gets a $300,000 allocation in a hot deal. He invests $1,000, forms a syndicate, raises another $299,000, and then succeeds. Subsequently:
John Smith's syndicate members get pro-rata tokens in the deal.
John Smith can now lead deals himself.
The startup gets a top marketer and a group of his friends to help them.
AngelList gets a small carry on the syndicate (usually 1%).
Everyone wins, and this simple product was the genesis of the massive wave of天使投资人 that followed.
John Smith can now lead deals himself because he has proven deal experience and can get a large allocation in any follow-on round.
This meant that startups had to give天使投资人good follow-on terms to keep them happy and engaged.
Over time,天使投资人became more powerful than funds, and by 2018, funds were largely shut out of early-stage venture capital.
Anyway… back to the crypto space.
In 2016, I moved to San Francisco to work on the venture capital team at AngelList and started trading cryptocurrencies everywhere, but that’s not the focus.
Besides startup equity, venture capital funds are also subject to regulatory restrictions, making public offerings challenging.
However, Naval became a true crypto believer earlier than most, spinning off CoinList from AngelList in 2017 to focus on cryptocurrencies.
CoinList's mission is to build a seamless, compliant way for companies to conduct their token offerings.
Interestingly, CoinList did not face the adverse selection issues that AngelList encountered, so it remained platform-centric.
While a rapidly growing seed-stage SaaS company has no interest in 1,000 retail supporters, every company in the crypto industry wants as many supporters as possible.
CoinList found true PMF from day one, with its first client being Filecoin, which raised $200 million, and that says it all.
In that cycle, there were some decent projects like Stacks selling, but by Q2 2018, the situation took a sharp turn.
CoinList went over a year without earning any revenue from token sales, and the situation was dire.
I (the author of this article), Mike Zajko (former CoinList sales director), and other CoinList members would head to the bar on Friday afternoons, downing six pints of Guinness and pondering what they were doing.
But the market recovered, and by the end of 2019, the team wanted to issue tokens again. They quickly helped launch ALGO, NEAR, SOL, and several other tokens.
The token sale product was largely the same ------ the team still wanted as many token holders as possible.
The biggest difference was that, so far, most lawyers told the team to completely avoid the U.S. Thus, these were all sales excluding Americans.
CoinList experienced ups and downs but launched a series of tokens that made users a lot of money.
Ultimately, if you’re in this industry, that’s the KPI.
Starting in 2022, the game shifted from token sales to airdrops.
Once OP and ARB abandoned public token sales, most blue-chip teams issuing tokens listened
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The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
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