Why We Are Not Doing A Billion Dollar ICO
We are doing an Initial Crowd Offering. Crowd, not coin.
tl;dr: On Wednesday 23 August at 1200 Pacific Daily Time we are raising money through the crowdfunding site Wefunder. If you want to pre-register, please head to our campaign and create an account: https://wefunder.com/balance
Balance began life a couple of years ago as a side project. Ben, Christian and I wanted to build a better interface for our banking data using Plaid.com. We wanted to live the indie dream by building a great product and selling it to customers. We self-funded development with savings and freelance gigs.
We launched Balance for macOS in February and Apple were kind enough to feature the app in the U.S. Mac App Store.
We were happy with the launch and had lots of plans to improve the product for our customers. Then, two things happened:
1.) The Ether Price Went Up 100x
Three years ago I worked for the Ethereum Foundation for a month and bought some Ether in the sale. I had sold a bunch of it to fund Balance. The remaining holdings (or HODLings ;) were going up hugely in value and I needed to understand why.
2.) We Freelanced For Filecoin
Christian’s roommate was working for Protocol Labs and he had kindly offered us some freelance work to design CoinList and Filecoin’s site.
These two experiences took the whole team back down the protocol rabbit hole. What we saw really blew us away. You can read more about this on my post about the sale.
We have worked on the best and the biggest Initial Coin Offerings
The Ether sale will go down in history as one of the best crowd funded projects of all time. Thousands of people invested in the protocol and saw amazing returns on their capital.
The Filecoin sale will go down as one of the biggest Initial Coin Offerings of all time. A few accredited investors pumped a 9-figure sum into the company’s protocol to help build a formidable competitor to Amazon.
As a team, we deeply understand the nature of Initial Coin Offerings. We know that tokens are meant to breathe economic life into a protocol.
Community Capitalism
I think it is fascinating that U.S. crowdfunding and token funding were released into the world at such a similar time.
Both trends have been incredibly successful. The interest in token funding has spiked massively:
This capital has flowed into lots of incredible and terrible projects who have asked for digital currencies in exchange for tokens.
In a bull market, it is hard to keep your head. It would be easy for us to throw up a whitepaper and ask for millions of dollars. We are deliberately not doing that for several reasons:
We are an inexperienced team of experienced people
Ben, Christian and I have a great working relationship. We have been working together for nearly two years now. We make each other laugh, we care about great software, and we are willing to call each other out when something is wrong. We have brought on 3 full time team members in the last 3 months. They are all very experienced people. Working together is a new experience. Great working relationships take time and energy to build. We are starting to develop bonds and understanding each other. This process cannot be rushed.
We want to raise enough money to find product-market fit
We have shipped a subscription-based app but we have aspirations to build an interface for the open financial system. That is a huge leap. We think we can ship a lot of great software with a tight team of amazing people. We want to have lots of happy customers before we raise lots of money.
If we raise too much money, we will be shielded from the brutal reality of the market. If we do not make something people want, this company deserves to die. We think we can figure that out with a relatively small sum of capital.
We are building a product, not a protocol
We are focussed on creating the best interface for digital currencies and tokens. It is a big project but it is not a protocol. We do not want to create a token and issue it for no good reason.
If we create a token, we want it to have real value.
There may come a time in the future where we launch a useful protocol with a valuable token. We are not doing that now. We want to create a company that creates products for protocols. To help do that, we are raising money through crowdfunding.
We want to raise from the community we are helping
At Ethereum, I saw the best aspects of crowdfunding play out. Thousands of people were incentivised to help get the project off the ground. It survived the lows because lots of people believed in the protocol and had a share in the upside. We want to raise from the people who are using digital currencies. Our community will become an important part of our moat. If we build the best tools for the digital currency community, it will be because of their feedback and help. Allowing them to participate in our funding will turn them into owners and evangelists for the company.
Too much money could hurt us
If you have spent any time in a gym, you will always see the person who thinks they are strong but is actually weak. You can see them quivering beneath the weight, screaming at the top of their lungs, and desperately trying to lift the bar. They have terrible technique and their ego is pushing them further than their muscle tissue will allow.
I feel the same way about companies and the teams of people who build them. Young teams who are used to salaries measured in thousands of dollars are simply not ready to deploy hundreds of millions of dollars. It takes time to build up the organisational strength to do that. It takes patience and discipline to do that. Raising all of your future funding in one huge raise is not a good idea.
We are ready to deploy a 7-figure sum of capital. We are not ready for a huge injection of digital capital from the community.
We are in the digital trust business and we want you to trust us
If this project is going to work, it is going to take a long time, a lot of work, a lot of people, and a lot of capital. We want to raise the right amount of money for our company so that we can ship great software to our customers.
We are asking you to trust us with your capital. We will use it to make something people want. If we can do that for our customers, our investors will see a great return.
On Wednesday 23 August at 1200 Pacific Daily Time we are raising money through the crowdfunding site Wefunder. If you want to pre-register, please head to our campaign and create an account: https://wefunder.com/balance
