Eager crypto enthusiasts believe that ICOs and cryptocurrencies will replace venture capital, but what if VC investors embrace crypto in their existing operations?
That's the thesis that SparkLabs is a US-Korean company that operates Global Funds and Early-Phase Accelerator programs, today with the introduction of a security token to the test , The company said it is trying to "democratize" investment opportunities by basically allowing anyone to buy their accelerator program through the token, making them essentially LP-like investors.
SparkLabs The team's past successes include Siri ( sold to Apple ) and DeepMind ( sold to Google ) and a portfolio of over 160 startups more than 60 countries. Its accelerator program has gone through more than 80 companies, of which 80 percent have increased funding by an average of $ 3.5 million.
The experiment includes two new accelerator programs from SparkLab: a six-month IOT initiative in the Korean Smart City Songdo and Cultiv8 an accelerator for agriculture and food technology in Australia
The company has already raised capital for both initiatives – $ 5.6 million for Cultiv8 and $ 500,000 for the IOT program – but it aims to get at least $ 6 million out of the token. That's the minimum sales, while the hard cap is $ 30 million.
SparkLabs is working with two crypto platforms to handle token sales in terms of KYC, operations, and audience development. They are Argon Group which has a community of crypto investors, and Swarm a platform that connects private investors with crypto opportunities in PE and VC funds.
19659002] ICOs and tokens are in a precarious position in the US, while the SEC is investigating companies that have raised money through ICOs and investors. Against this backdrop, SparkLabs targets primarily non-US investors, but the token is open to eligible US investors.
Unlike traditional LPs, which wait for the life of the fund to generate financial returns Sparklabs plans to inject liquidity into a secondary-share sale by listing the token on stock exchanges in the future. That makes it tradable. But the company does not advise US-based investors to trade it, as it is likely to violate the law.
Despite the legal gray areas, the company strives to experiment with a token after supporting a number of cryptographic techniques. Base company on traditional equity investments since 2014 and also launched its SparkChain fund .
"We think the ICO market will remain, it's a fundraising opportunity [that] that will complement B and Series C rounds," said SparkLabs co-founder and partner Jimmy Kim TechCrunch in one Interview. "As a fund, we believe in this space, and we thought we could dip our toes in the water and try it out."
A series of 500 startups recently founded by companies offered their own security feature earlier this year, but SparkLabs could be the first established company to officially adopt the strategy. Already, there is strong interest from crypto-hedge funds and individuals seeking to diversify their crypto assets, Kim said, but the theory is pretty much unaudited, so it will be interesting to see how it is absorbed by the broader market.
Sure, "It could be the first of many."
"We are opening the doors to investors we would not normally reach," Kim said. "If things go well, of course we will do it in the future by other means."
Note: The author owns a small amount of cryptocurrency. Enough to gain understanding, not enough to change a life.
SOURCES: TECHCRUNCH.COM GSMARENA.COM MACRUMORS.COM FIRSTPOST.COM ANDROIDCENTRAL.COM PHANDROID.COM TECHSPOT.COM
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