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There are a remarkable number of sketchy blockchain companies in this list-- many for larger $5 to $10 million dollar ranges. I wonder how many of them were si

• vmception 6y ago
  Although ICO purchasers like to imagine they have investments in "not-securities", proper accounting of token sales from the issuer is revenue, and payroll goes to employees. So if they had that revenue and also paid payroll to employees in 2019, they would be eligible. The 2018 ones were screwed though, too far back. They probably exhausted a lot of their runway on marketing and extortionate exchanges. Blockchain community is unique in that they treat $5-10 million raises as "forever money" for an indefinite time period, when even Series A tech companies would not be expected to last more than 15-18 months. So there are a lot of misalignments in that sector, which are poorly understood by both the people in the sector, as well as critics outside of the sector. The issuers themselves often have good legal help and proper accounting, as it is a tricky regulatory environment to begin with, which exacerbates these misalignments with their purchasers and psychological investors.
  • nullc 6y ago
    > often have good legal help That hasn't been my experience, instead my experience is that many of these companies went through large numbers of lawyers who told them what they wanted to do would be likely found to be illegal before finding some that would sign off on it. > "forever money" for an indefinite time period For the most part this is because they don't deliver anything useful, so they won't get any more (at least not until they spin up a new operation under another name). Some of the companies I see in that database have principals who are on their third or more failed blockchain/ico and hey have become exceedingly efficient at it.
    • vmception 6y ago
      ICOs are very expensive and the exchanges extort via listing fees, requiring market makers that want the issuer to post liquidity in both their token and multiple negotiable assets, continually, and then the market makers passing commission costs from the exchanges onto the ICO team. This is continued because nobody can talk about it as they will immediately get delisted, the community will point fingers at the project team, AND the regulators will view the issuer as promising liquidity which further moves their asset into unregistered securities land, opening them to sanctions for the sale and promotion. Ultimately the token traders and critics have no clue what's going on and think the founders have to be married to a software project with a runway that lasts forever because software development shouldn't be that expensive. Yes selling tokens is a viable revenue event, but not a recurring revenue event for that project. So launching new projects is the only way to do that, and prior experience is more important to the actual investors providing the bankroll who make a lot of money putting these together. Many people are buying them for the wrong reasons, and there totally could be a market of the same size of people buying them without an expectation of profit. It is an entirely viable business to make a website with one button that says "purchase button tokens to vote on the CSS color of this button by staking!", which I think should be recognized. Even the concept of "failed" is misaligned and more often related to exchange rates and volume of the token, more than whether the team did anything. There is a whole other market of investors bankrolling the parent organizations that are churning out ICOs, because all they see are highly scalable revenues and a multiple of that. The people buying them need to be more discerning if they want a different result. Token issuance is primarily a game of entertainment and placating a community, and it should be put in that category. Or the community should be an active participant in making the token more useful and valuable. They certainly do have employees and would be eligible for PPP. If they lied and are in a game of chronic fraud, now featuring the US Treasury, that's pretty risky!