After FinShi Capital completed its ICO on October 6 and raised $21.4 million, there wasn’t much news from the team. It might seem like we did nothing. But, on the contrary, our work had just begun after the ICO. Our team continues to work in accordance with the plan. In this article we will tell you what we managed to do in November 2017.
Over the past month we had dozens of meetings with investment funds, institutional investors and broker companies. With some of them we agreed to work closely together. As soon as our lawyers prepare all the official documents, we will be able to announce our new partners. Unfortunately, not all such partnerships will be released to the public: some companies wish to keep our cooperation a secret.
FinShi Capital continues to seek useful partners in legal, technical and marketing areas to support, co-expertise and co-invest in start-ups.
In our social networks we briefly told you about the problem that we’d faced. The fact is that due to a huge amount of incoming requests from projects that wish to receive investments, we do not have enough time to study all of them thoroughly. We used to get 2–3 new projects a day, now there are days when we receive up to 20! Therefore, we decided to change the selection method. Yes, we will not be able to study each application due to this change. But our fund doesn’t have to. The fund’s goal is to select the most promising projects and the ones that are most likely to succeed. Regardless the way a project got to us (the team send a request or one of the analysts noticed it), all incoming projects will be passing through an additional stop-filter. First we make sure that the project fits our focus, then we look for any stop factors which can prevent the project from full-fledged check. Only then the project can get to our analysts for Due Diligence. This approach significantly influences the selection process, allowing only the finest projects to get to them. Thus, they won’t have to study all the projects, only those that passed a certain “income control” and received a positive response.
In November we reviewed over 300 projects, of which 12, at the time of writing this article, are being studied by our analysts, 2 are being discussed with the founders and 2 are being invested in. Due to legal restrictions, it usually takes 1–2 months before we can announce the projects we invested in. Overall by the end of November our fund has 3 portfolio investments and several upcoming ones. All these projects have excellent growth potential and auger well for getting high profits to the fund’s investors.
Speaking of profits, our investors will receive the first dividends in the beginning of 2018: we already know when and how we will be able to exit certain projects.
Conferences and other events
On November 2 — opening of TechnoCult (Technological Entrepreneurs Forum). Andrey Orlov, the Managing Partner of the fund, took part in it as a speaker and as an expert of the panel discussion. The discussion was about the best ways to start a business, attract investments and launch ICO. And some time was, of course, devoted to Blockchain technology.
On November 3 the fund’s staff gave an introductory lecture about Blockchain in the Tyumen Technopark.
On November 15–16 the fund’s team took part in the 6th Blockchain & Bitcoin Conference in Moscow.
On November 16 the team gave one more introductory lecture about Blockchain and cryptocurrency for CIOs club. In response the fund received several pieces of valuable advice from IT market experts.
On November 21 FinShi Capital together with Tyumen State University and Sberbank organized a Blockchain Meetup Siberia. Together with the university’s community and entrepreneurs, we dug into the prospects of Blockchain as a technology and the speculative risks of investing in cryptocurrencies.
On November 24 West-Siberian bank of Sberbank of Russia and our managing partner Andrey Orlov set up a meeting with students from Stanford University. When they found out about the activities of the cryptofund they were quite surprised at the fact that such projects appear in Russia.
On November 28–29 — the final part and closing of the TechnoCult Forum and awarding of the winners. The fund’s partner Vyacheslav Sorokin presented gifts and certificates to three winners who, in the opinion of our fund, have the best prospects in the venture market.
On November 30 FinShi Capital took part in Blockchain & Bitcoin Conference in Cyprus.
Legalization and exchanges
According to our WhitePaper, tokens should be freely traded on several exchanges. FinShi Capital’s tokens (FINS) will in the nearest future hit those exchanges. Initially, the fund team planned to organize trading of the token on exchanges at the end of October. However, the fund’s tokens have a unique status of a security, as they are provided with fund shares in start-ups and assume the receipt of dividends for their investors. Therefore, almost all exchanges are extremely reluctant to negotiate the listing of such a token, because the US Securities Commission, along with regulators of some other jurisdictions, introduce additional requirements for exchanges that organize trades of such tokens.
In addition, in November, conditions for the release of a new token to the market were not so good due to expectations of popular cryptocurrencies hard forks. We understand that the price of the token is determined by the market’s demand, but the fund’s team can also partially contribute to this, at least with the right time of the token’s release. Most of FinShi Capital’s tokens were bought by institutional investors. They didn’t enter the fund for immediate profits from exchanges, they invested in it to receive dividends from its main activities, and they do not have the economic expediency to rush with the withdrawal from the fund. Unlike large investors who are proficient in the financial market, small private investors and bounty partners of the fund are likely to begin selling their FINS tokens in the first days of listing on exchanges. This is, of course, their right, although it is not far-sighted, since the fund will make new investments and the token’s value will only grow over time.
As for the legal side of the fund, our lawyers are constantly working on it. The crypto market is changing very quickly, and the attitude towards ICO and cryptocurrencies in different countries is changing even more rapidly. At the time like this it is essential to be mobile, in order to save time and money on legal support. A simple example: earlier we advised ICO projects to use Singapore or Switzerland as a legal jurisdiction without any doubts, but now it’s not so simple. We have to constantly look for new options and constructions within the legal fold.
The fund’s tokens and website
A lot of time had to be spent on interaction with the fund’s bounty partners. Many of them didn’t study the campaign’s rules thoroughly and didn’t register the Investor’s Personal Account in time. As a result, we had to check each of these participants and the number of tokens they had earned, then manually conduct each transaction. Most likely, such inattention from their side was due to the fact that they simultaneously participated in promotion of 5–10 different projects. And there were cases when one person had 2–3 fake accounts registered. Of course, with so many accounts and projects it’s easy to get confused and fail to comply with all of the requirements. Moreover, we noticed an interesting trend: the most demanding and eager to get the earned tokens as soon as possible were precisely those partners who didn’t register the Personal Account in time and who poorly complied with the Campaign’s rules.
We have repeatedly had technical problems with Investor’s Personal Account, which is available on the website https://ico.finshi.capital. Each of these failures reminded us how important it is to choose a responsible technical partner on whom you can rely in critical moments.
The fund’s website is now being updated. We have added a news section, structured information about the fund’s ICO results, now we are preparing detailed information about each investment of the fund.
The fund’s plans for the next month are: to sort out all the remaining issues left after our ICO, including the destruction of unallocated tokens and listing on several exchanges. We will announce several invested projects by the end of this year. We are also planning to focus on European and Asian markets. We believe that these regions have many promising projects.
In the middle of December, the fund’s partners are going to visit Blockchain related conferences in Kiev, Singapore and Moscow. Such conferences help us stay informed about all the latest developments on the market, find new partners and promising start-ups.
At the end of the year we will set up a meeting with our investors, we will announce the date and time in advance.
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