How do the world’s top Internet companies find investors?
On June 17, 2010, an entrepreneur used MIT alumni mailbox to send an email of less than a thousand words to more than a dozen potential investors. The letter briefly introduced a taxi-hailing software. The sender wrote at the end of the email: “The details are here. Do you need me to introduce you?”
This taxi-hailing software is Uber, which has a market value of nearly $83 billion.
When this email was sent, less than a year after Uber was founded, it was also called “Uber Taxi.” In the end, only four or five people decided to invest in this project, totaling US$4 million. Later facts proved that this was one of the most successful investments in the history of venture capital.
The sender of this email is Naval Ravikant, the founder of AngelList. This is the most well-known crowdfunding platform in the United States, and top Internet companies such as Uber are all crowdfunding here.
What everyone doesn’t know is that 8 years after founding AngelList, Ravikant entered the currency circle and founded CoinList, the most well-known financing platform.
Coin circle version AngelList
Ravikant and his partners first preached entrepreneurial knowledge through the blog Venture Hacks (entrepreneurial hackers), and later developed and expanded, helping well-known companies such as Ubert complete equity crowdfunding.
Ravikant, who has been deeply involved in equity crowdfunding and financing, has also paid attention to the encryption field early.
In March 2014, Ravikant published an article entitled “The Bitcoin Model for Crowdfunding”. At the end of the article, he wrote: “Bitcoin is not only a currency, it is not only a A protocol. It is a true crowdfunding model and platform-open, distributed and fully liquid.”
Looking at it now, Ravikant’s point of view has to be said to be forward-looking. His friend, Balaji Srinivasan, a partner on the board of a16z and founder of Earn.com, believes that this article contributed to the subsequent token launch and the emergence of IC0 to some extent.
The head of Coin Center Peter van Valkenburgh also believes that Ravikant has brought a certain degree of “Silicon Valley credibility” to the chaotic IC0 phenomenon.
Three years ago, Bitcoin was still on its way to triumph and IC0 was also sweeping a wave of financing. Filecoin’s development team, Protocol Labs, decided to raise funds again and get a new development fund.
Ravikant, who has invested in hundreds of Internet technology companies, was originally an early investor in Protocol Labs. In the context of turbulent token financing, he and Filecoin founder Juan (Juan Benet) hit it off and decided to launch CoinList.
From a literal point of view, everyone can find that CoinList can be said to be a financing platform against AngelList.
Although CoinList claims to be an independent operation, in addition to CEO Andy Bromberg, several other co-founders and consultants, including CTO, COO and product director, all come from AngelList.
In addition to the Silicon Valley halo, the successful cold start of CoinList is also due to Filecoin. On August 11, 2017, Filecoin completed a financing of more than 200 million US dollars in only one hour, which was the blockchain project with the highest financing amount at that time.
Our own platform finances ourselves. This approach is exactly the same as AngelList’s original experience.
In September 2013, AngelList successfully raised USD 24 million for itself through a self-developed syndicate model. This Syndicate model simply means that the lead investor initiates an investment in a project, and other investors certified by AngelList can follow up on it, and both parties establish a non-binding investment commitment. The lead investor can earn 0~25% of the incidental income of the investment profit of the investor.
Four years later, Filecoin successfully replicated, but the amount of financing doubled by 10 times.
In AngelList’s Syndicate debut, in addition to lead investors Atlas Venture and Google Ventures, more than 100 other institutional and individual investors participated in the investment. In Filecoin’s financing, more than 2,100 investors participated, followed by Blockstack, which raised $50 million from over 800 investors.
CoinList’s path to compliance
Looking back at the development history of AngelList, it faced the dilemma of closing at any time when it was launched. According to the financial regulatory policy of the United States at the time, only brokers registered with the government can act as an intermediary between entrepreneurs and investors and collect commissions.
This dilemma did not change until Obama signed the JOBS Act in April 2012. Equity crowdfunding was finally recognized by law, startups were able to raise funds publicly, and AngelList soon gained free development space and became One of the vanes of the global equity crowdfunding industry.
Going fast does not mean going far, especially when it comes to the securities and financial industries. Ravikant knows that compliance is a prerequisite for sustainable development.
When AngelList was first founded, equity crowdfunding was still in a regulatory gap in the United States. Ravikant and his team spent a full 6 months lobbying and running among members of Congress. They also submitted a petition signed by 5,000 investors and entrepreneurs across the country. “It’s really exhausting and very difficult.” In the end, they won. .
Looking at the currency circle again, when IC0 was growing savagely, most blockchain financing platforms and teams did not pay much attention to compliance issues, but many projects encountered the US SEC’s “after-autumn settling”.
In October of this year, the instant messaging app Kik and the US SEC reached a settlement agreement. This tug of war on “Kik IC0 financing compliance” lasted for three years, and finally ended by paying a fine. Similar experiences include EOS, Tezos, Enigma and other projects. The worst is Telegram’s encryption project TON. The team eventually stopped development.
The risk of regulation was known from the first day CoinList was founded.
Like AngelList, CoinList has different asset requirements for different investors. The platform will conduct complete due diligence on the projects that want to be financed through its platform, covering the team, products, markets, trading conditions, legal structure, and token economics, etc. Scope-this is definitely an expensive and time-consuming process for a fledgling company, and it is destined to shut out many investors and projects.
In July of this year, it was rumored that the agreement signed by the Filecoin team and investors involved “gambling”. If the project party fails to fulfill the promise to be launched this year, a full refund will be required. Because there have been several delays in the black history, once the news was reported, many people gloated, and Filecoin cannot be launched as scheduled and refunded clauses, but the deadline is actually until July 18, 2022.
Compared with other project parties who have nothing but white papers and no proof, Filecoin’s mechanism has been regarded as “conscience”, which is actually due to the strict requirements of CoinList when reviewing projects.
In the three years since its establishment, CoinList has received financing information from more than 3,000 projects, but only a dozen projects can be funded through this platform, and only one project will be launched in an average of two and a half months. Although the number is small, at least investors do not have to worry about regulatory issues.
The crypto map of CoinList
Initially, CoinList only financed blockchain projects.
According to Ryan Shea, the co-founder of Blockstack, the second project on CoinList, he believed in CoinList based on his trust in Ravikant: In addition to helping identify potential risks from the token sale plan, Ravikant also recommended one A former SEC official served as legal counsel for the project. “He has a group of the best partners and companies, and they played a huge role.”
With the foundation of the previous projects, CoinList has established a professional status in helping celebrity blockchain project financing.
Today’s AngelList is composed of three platforms: from the earliest release of venture capital information, to talent recruitment, to joint investment. “These three platforms are equally important. Whether it is social networking, recruitment or financing, they are all important to entrepreneurs. It is difficult for you to separate these three pieces.” Ravikant said.
The same is true for CoinList. Starting in 2018, CoinList has continued to expand its business: first, it held hackathons, built a developer community, and participated in project incubation; then last year it raised 10 million US dollars to deploy secondary market transactions and wallet business, and then to provide online wBTC exchange services this year. Enter the DeFi and hosting business.
From a single link to serving the entire project life cycle, CoinList has a strong AngelList style.
In 2019, CoinList announced the completion of US$10 million in Series A financing. According to media reports, the funds will be used to deploy trading platforms and wallet businesses. Interestingly, in this round of participation, Twitter founder Jack appeared. The figure of Dorsey, this is his rare participation in foreign investment in the crypto field.
In response, Dorsey responded, “The crypto industry needs a reliable platform to start new projects. CoinList is the leader in this industry, and trading is the next logical step.”
History always advances in reincarnation. In 2007, Twitter received Ravikant’s investment in Series A. Twelve years later, Twitter founder Jack Dorsey invested in Ravikant’s CoinList. This coincidence across time and space is also surprising.
