The Singapore-based company Cross Coin intends to release up to 5 million tokens during its Initial Coin Offering (ICO). Token cost is $1, which gives access to the venture capital industry to a wide range of potential investors. The first $1.5 million raised will be spent on refinancing the 21 startups that passed the Starta Accelerator programme in 2016-17, with remaining funds to be spent on investing in the next tranche of startups.
‘Investors can put their money on startups that have already passed the initial stages of their development and raised their first investment from various funds, accelerators and business angels. During the Starta Accelerator programme, 21 startups were integrated into the business environment of the United States – the largest and most promising market. Our project is unique in this regard. Investors gain access to a diversified portfolio of actively developed and promising startups in the venture market. I’m confident that our collaboration with Cross Coin will prove a promising format for the venture market, which will be further developed by others in the future,’ comments Alexey Girin, Head of Starta Accelerator and Managing Partner of Starta Capital.
News about the purchase of startups by strategic investors – ‘exits’, in venture terminology – exercises the most significant influence upon the price of their shares on the secondary market. In this case, the issuer of the Cross Coin tokens will receive a part of the profits from Starta Accelerator from the exit of each of the 21 startups, in proportion to its share in the portfolio – that is, 33%. The total amount of income from Cross Coin’s exits, less any administrative expenses, will be directed to the repurchase of tokens at market price.
Additional news triggers for the secondary token market will be as follows: raising a new round of investments by any startup from the Starta pool; increasing startup revenue; partnership with major market participants; contracts of B2B startups with large new customers; getting startups into large accelerators for the next investment stage, amongst other events.
‘The democratisation of venture investment is the primary idea of this project. Exits of the startups in the investment pool will allow the ICO’s participants to receive an income comparable to the level of profitability in the existing venture industry,’ comments Kayrat Kaliyev, Head of Cross Coin. ‘The secondary aim for the project is the creation of a highly liquid secondary tokens market. This will allow many potential investors to participate in venture financing of projects with a low entry threshold and the ability to exit at any stage of their implementation. Gains in the market price will provide an opportunity to achieve ROI from reselling the tokens. The relatively low initial value of the token is an additional factor that increases its liquidity and attractiveness.’
Alexey Girin is a business angel investor, a private investor and a Master of Economics. He is co-founder and managing director of venture capital fund Starta Capital and Starta Accelerator. He has been working in the field of auditing and finance for more than 15 years and in the venture capital industry for more than 10 years.
Kayrat Kaliyev has worked in the financial sector for more than 13 years. He is currently deputy director of the Financial Technology Department of the Astana International Financial Center in Kazakhstan, and Head of the Cross Coin Company in Singapore.
Starta Accelerator is accelerator program in New York that was started by the Starta Capital Foundation in 2015. The mission of the program is cultural and business adaptation in the USA and integration into the investment ecosystem of technological startups from Russia and the Eastern European countries.
Cross Coin has call options for 33% of the Starta Accelerator 16/17 SPV, a company that owns 7% in each of 20 startups and 2% in the 21st start-up, all of which passed the Starta Accelerator programme in 2016-2017. Each of the pool’s companies has been appraised with a market value of $1.9 million or higher.