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Here's what I don't understand: if you're a crypto project, why wouldn't you raise funds through an ICO yourself? What benefit does a16z give you? One of the bi

Here's what I don't understand: if you're a crypto project, why wouldn't you raise funds through an ICO yourself? What benefit does a16z give you? One of the biggest assets of crypto is the ability to self-fund. Also, since the space is relatively new, I have my doubts about the ability of a16z to provide any useful crypto experience.

chrisco255 8y ago
Unfortunately ICOs are still a grey area, legally speaking, with regards to the SEC. Some tokens are securities, some are not. Really depends on the structuring of the token and what it represents. At this time, from a risk perspective, I could see going with A16Z being a safer move. Plus, you get access to A16Z resources, which are substantial.
walrus01 8y ago
ICOs have become a self-mocking joke, considering how many are outright scams or contain huge technical flaws, or some combination of the two. The latest season of Silicon Valley parodies it pretty well.
TrevorAustin 8y ago
There aren't any regulatory issues with taking investment from the a16z crypto fund, where a public ICO can bring attention from the SEC and other bodies. It lets founders and developers focus on getting their token network off the ground instead of figuring out how to do a legally kosher token sale.
chadash 8y ago
For one, raising money through an ICO is a legal gray area without much legal precedent. So even with a good lawyer, you are taking risk with the related securities laws. You might prefer to avoid this risk by raising money the traditional way.
pdpi 8y ago
One good reason is that money doesn’t buy you connections, but an a16z investment does. Another is because ICOs typically turn your currency into a security at least temporarily so you might as well play that game properly. A third one is that, rather than the reputation that comes with an ICO, you’re instead getting the reputational baggage of being a16z alumni.
- tarr11 8y ago
  > One good reason is that money doesn’t buy you connections Time for a crypto LinkedIn?
  - shawn 8y ago
    BlockedIn Especially if it works. More seriously, it's cool that keybase solved the identity problem. It's traditionally been a very hard thing to know for a fact that you're speaking with a certain individual, unless they were compromised. They also have an encrypted github now, which functions very well. And one of the only realtime chat messaging systems where you can open private chats with whoever you want, if you know their name. Point: I think Keybase might increasingly take over the role that github currently fills. It's hard to imagine now, but people underestimate the effect of 10 years. And keybase seems to suddenly have a lot of assets that are very appealing, especially from a crypto standpoint. If I were trying to topple governments with code, most of my work would be encrypted on keybase, and my comms (what little there would be) would be via signal. But my identities would be proven via keybase. One smart move for gitlab might be to create some kind of realtime messaging system for programmers, similar to the niche that slack communities currently fill. Slack never seemed to embrace the community model -- you have to use hacks just to host a slack community, and then you don't get search for more than 10k messages, which vanish quickly. Discord has been eating Slack's lunch from a technical and user count standpoint (though perhaps not profit). Gitlab could compete by rolling out what slack should have been: an open community-oriented comms service with tools programmers love, plus a place to host your code. Discord doesn't have that, and keybase doesn't have very good support for teams yet.
lonnyk 8y ago
They list out the reasons on the bottom of the site.
jdoliner 8y ago
Well, there are certainly some non-cynical reasons. But one obvious one is that if you sell 10 Million of your token to A16z I bet you won't have much trouble selling billions of your token to the masses. I'm sure A16z is perfectly sincere about being long-term focused investors, but they're so perfectly positioned for pump-and-dump style schemes they may wind incurring their ill effects accidentally.
lintroller 8y ago
What benefit does a16z give you? Beyond the legitimacy of being backed by a well-known venture capital firm, the most obvious is from the article: "We provide operational support to entrepreneurs. Our crypto investments have access to the same 80+ person a16z operating teams as do our non-crypto investments. Our operating teams have deep expertise in executive and technical recruiting, regulatory affairs, communications and marketing, and general startup management. We are responsible participants in the governance of companies and the governance of networks."
deleted 8y ago
[deleted]
shawn 8y ago
It's sort of not cool to choose a16crypto as your username. HN wouldn't work if we didn't have identities, and traditionally the identity of the author is taken by the author. On the other hand, it's immediately obvious you're unrelated, so maybe it doesn't matter. To answer your question, as the world stabilizes and the crypto scene becomes less tumultuous, we'll see the rise of traditional models. It's a smart move to start that process sooner rather than later. In the old days, you won by controlling a "channel" -- whether it's a literal TV channel, or a limited asset, or anything where people had to go through you and you alone. The internet briefly disrupted that old model. But once again it's true: YC won thanks to HN, for example. It's a channel they control, and it shapes us and the way we think. Once ICO scams stop working, people will eventually realize that the fundamentals are what matter: solid networks, solid resources, and a vision with a group of people to build it. ICOs rarely get you any of those, let alone all of them.
dang 8y ago
You can't pick that username—it's misleading, as shawn pointed out. I've banned this account, but if you want it unbanned you're welcome to email us (hn@ycombinator.com) with a username that's both neutral and available, and we'll change it for you.

chrisco255 8y ago

Unfortunately ICOs are still a grey area, legally speaking, with regards to the SEC. Some tokens are securities, some are not. Really depends on the structuring of the token and what it represents. At this time, from a risk perspective, I could see going with A16Z being a safer move. Plus, you get access to A16Z resources, which are substantial.

walrus01 8y ago

ICOs have become a self-mocking joke, considering how many are outright scams or contain huge technical flaws, or some combination of the two. The latest season of Silicon Valley parodies it pretty well.

TrevorAustin 8y ago

There aren't any regulatory issues with taking investment from the a16z crypto fund, where a public ICO can bring attention from the SEC and other bodies. It lets founders and developers focus on getting their token network off the ground instead of figuring out how to do a legally kosher token sale.

chadash 8y ago

For one, raising money through an ICO is a legal gray area without much legal precedent. So even with a good lawyer, you are taking risk with the related securities laws. You might prefer to avoid this risk by raising money the traditional way.

pdpi 8y ago

One good reason is that money doesn’t buy you connections, but an a16z investment does. Another is because ICOs typically turn your currency into a security at least temporarily so you might as well play that game properly. A third one is that, rather than the reputation that comes with an ICO, you’re instead getting the reputational baggage of being a16z alumni.

tarr11 8y ago
> One good reason is that money doesn’t buy you connections Time for a crypto LinkedIn?
- shawn 8y ago
  BlockedIn Especially if it works. More seriously, it's cool that keybase solved the identity problem. It's traditionally been a very hard thing to know for a fact that you're speaking with a certain individual, unless they were compromised. They also have an encrypted github now, which functions very well. And one of the only realtime chat messaging systems where you can open private chats with whoever you want, if you know their name. Point: I think Keybase might increasingly take over the role that github currently fills. It's hard to imagine now, but people underestimate the effect of 10 years. And keybase seems to suddenly have a lot of assets that are very appealing, especially from a crypto standpoint. If I were trying to topple governments with code, most of my work would be encrypted on keybase, and my comms (what little there would be) would be via signal. But my identities would be proven via keybase. One smart move for gitlab might be to create some kind of realtime messaging system for programmers, similar to the niche that slack communities currently fill. Slack never seemed to embrace the community model -- you have to use hacks just to host a slack community, and then you don't get search for more than 10k messages, which vanish quickly. Discord has been eating Slack's lunch from a technical and user count standpoint (though perhaps not profit). Gitlab could compete by rolling out what slack should have been: an open community-oriented comms service with tools programmers love, plus a place to host your code. Discord doesn't have that, and keybase doesn't have very good support for teams yet.

lonnyk 8y ago

They list out the reasons on the bottom of the site.

jdoliner 8y ago

Well, there are certainly some non-cynical reasons. But one obvious one is that if you sell 10 Million of your token to A16z I bet you won't have much trouble selling billions of your token to the masses. I'm sure A16z is perfectly sincere about being long-term focused investors, but they're so perfectly positioned for pump-and-dump style schemes they may wind incurring their ill effects accidentally.

lintroller 8y ago

What benefit does a16z give you? Beyond the legitimacy of being backed by a well-known venture capital firm, the most obvious is from the article: "We provide operational support to entrepreneurs. Our crypto investments have access to the same 80+ person a16z operating teams as do our non-crypto investments. Our operating teams have deep expertise in executive and technical recruiting, regulatory affairs, communications and marketing, and general startup management. We are responsible participants in the governance of companies and the governance of networks."

deleted 8y ago

[deleted]

shawn 8y ago

It's sort of not cool to choose a16crypto as your username. HN wouldn't work if we didn't have identities, and traditionally the identity of the author is taken by the author. On the other hand, it's immediately obvious you're unrelated, so maybe it doesn't matter. To answer your question, as the world stabilizes and the crypto scene becomes less tumultuous, we'll see the rise of traditional models. It's a smart move to start that process sooner rather than later. In the old days, you won by controlling a "channel" -- whether it's a literal TV channel, or a limited asset, or anything where people had to go through you and you alone. The internet briefly disrupted that old model. But once again it's true: YC won thanks to HN, for example. It's a channel they control, and it shapes us and the way we think. Once ICO scams stop working, people will eventually realize that the fundamentals are what matter: solid networks, solid resources, and a vision with a group of people to build it. ICOs rarely get you any of those, let alone all of them.

dang 8y ago

You can't pick that username—it's misleading, as shawn pointed out. I've banned this account, but if you want it unbanned you're welcome to email us (hn@ycombinator.com) with a username that's both neutral and available, and we'll change it for you.