Raise $1M; HODL $132MM. How crypto is changing the VC game.
After a recent conversation on LinkedIn spurred my curiosity, I went looking at how the current spike of ETH would look for the ICOs of 2017. The results shocked me.
Raising capital isn’t new. Raising capital in an asset class that can cause 15,000% gains; that’s a big deal. A damn big deal considering the cost to bring some of these nascent technologies to market. Dev costs alone are skyrocketing (as they should be).
Still, I would venture that most of the teams putting out ICOs in 2016 and early 2017 could not have predicted the run of BTC and ETH. I ran the numbers using just ETH, so some of these aren’t accurate if they only took BTC, but the meteoric rise of BTC tracked with ETH, better some months. (Anyone’s welcome to add a BTC column to the below spreadsheet.)
Let’s take a look at the leaderboard from two angles, % increase and current estimated value.
Mercatox, BlockCDN, Hacker Gold— all up 15,071% from the day’s high of $7USD for ETH in December 2016.
FIFTEEN THOUSAND PERCENT
Hacker Gold raised $653k, currently worth $99MM
Wings and Golem — up 10,520%
Wings’s raise of $2MM, currently at $220MM based on the day’s high of $10USD for ETH compared to where it sits today at $1062USD (to say nothing of where it was when it was up at $1400 a few weeks ago.)
Golem went from a respectable $8.5MM raise to $912MM — nearly a billion in USD.
Ironically, the biggest leader is The DAO, turning their $168MM raise to $14.8B. Another irony is Tezos; their $232MM raise is valued at a little over a billion as well (though only a 360% increase).
So while ICOs have been touted for their ability to circumvent the silver handcuffs of VC deals, it is the ongoing gains that are an astounding infusion of working capital that will likely speed this new tech into the market.
To that point, I didn’t take the time to delve into where these companies are spending that money, how well they’ve met their milestones, and how many of them have crashed. That dataset would be another interesting research project, likely one that could help dispel this ongoing fear that most ICOs are ideas with no ability to execute.
Spreadsheet of figures here: https://docs.google.com/spreadsheets/d/1tuxyFdWWerddt7gZnCXixsj-eVh1SXrm0uiPrnfupM0/edit?usp=sharing