ICO Review — Starta

Summary

Overview

Symbol: CRS

Crowdsale opening date: 4 Jul 2017

Crowdsale closing date: 3 Aug 2017

Country of origin Russia

Platform of ICO: Waves

Who should Invest

There can be many groups of investors to be interested in the ICO.

● traders (because of high volatility);
 ● venture investors (even with small funds);
 ● crypto asset holders (to diversify the assets with fiat investments);
 ● regular investors (because of liquidity);
 ● fiat investors.

Value for the Investors

The key attraction for this investment is the buy back option and the extra tokens they can earn for startups incubated through Strata. Also they get a chance to be a virtual shareholders into the 21 startups and future incubation in Starta portfolio.

My View

Starta is a great investment option for all types of general investors and with the fact that they have been sold out is a testament of the fact the value proposition of their ICO as a pure trading instrument and a way to be a shareholder in their Startup Accelerator SPV & portfolio is a hit.

Analysis

Background

Venture capital and startup community are one of the biggest adopters of this blockchain based technology.Historically venture capital has not been accessible to people outside VC community due to significant amount of capital required to enter VC deals, long term commitment and low liquidity of investments.

ICO is democratizing Venture Capital industry by providing an opportunity for everybody to participate in venture deals with minimal entry capital requirements and high liquidity of crypto assets.On the other hand, ICO is a new fundraising vehicle available to early stage startups to raise capital from bigger pool of investors that has not been accessible before, attract early followers and create community around the project.

Starta Accelerator

Starta Accelerator 16/17 LLC is a portfolio of 21 post-product stage tech companies.It is a USD 3M SPV (special purpose vehicle) created with a purpose of investing in early stage technology companies from Eastern Europe through acceleration in the USA.SPV owns average of 7% equity in each company at $2M valuation.

Most of the companies have traction in the USA and their home countries, some of them have already raised further rounds of investment at higher valuations than nominal portfolio value.

Starta Accelerator with its program helps East European frontier technology companies through exposing them to the U.S. market.The program is customized for Eastern European founders aiming to adapt to cultural and business environment in the U.S., complete and define global product/market fit, get traction and become part of local startup and investing ecosystem in the U.S.

Cross Coin

Cross Coin Pte. Ltd. is a private limited company incorporated in an ICO friendly jurisdiction (Singapore) with the only purpose to invest in Starta Accelerator. Cross Coin is in contract to acquire 33% of “Starta Accelerator 16/17” SPV and upon payment of the purchase price will have full rights to a revenue share from the proceeds of the Starta Accelerator 16/17 LLC portfolio companies. The Mission of Cross Coin is to democratize venture investments and bridge the gap between crypto and fiat economies.

Business Case

Eastern European focus allows Starta Accelerator to enter at up to $2M valuation at accelerator stage for a company with MVP and traction in home country which is lower compared to similar stage technology companies in the U.S. Companies based in Eastern Europe are undervalued on the global market due to the lack of tech business competencies, this way Starta benefits from arbitrage upside companies valuation through adding value in tech business competencies during acceleration in the U.S.

Token Sale

UPDATE

ICO is closed.

  • Total USD 5,035,374 raised a 1 token at $1
  • Plan to make it tradable within a month.
  • Also all who invested in ICO getting their tokens sooner than expected. GOOD JOB

ICO Structure

Cross Coin is raising up to USD 5 000 000 to invest in Starta Accelerator portfolio. $1 500 000 will be utilized to buy 33% of “Starta Accelerator 16/17” SPV at portfolio valuation price.

Funds above this amount will be invested in future Starta Accelerator portfolio with similar investment focus.
 They have a simple model of future profit distribution to token holders using token buyback mechanism. Tokens will be issued as a type of debt.

As a limited partner, Cross Coin will receive a profit share from “Starta Accelerator 16/17 LLC” and undertakes to utilize it to buy back the tokens at a market price.

ICO Terms

  1. Cross Coin issues «Starta» tokens, which will be distributed only
     during the ICO;
  2. Cross Coin commits to invest assets received during the ICO into
     Starta Accelerator portfolio;
  3. Tokens will be traded in a crypto assets stock market;
  4. Cross Coin undertakes to utilize all the net profit to buy back the tokens at a market price;
  5. Cross Coin undertakes to utilize all the assets remained after all the
     portfolio liquidity events (exits) to buyback tokens at a market price;
  6. The tokens buyback should take place during a fixed period after the net profit gained, and should not be more than one month;
  7. Tokens with a minimum market price will be distributed first.

Team

  • Alexey Girin
  • Ekaterina Dorozhkina
  • Ludmila Golubkova
  • Sergey Vasiliev

Katya Dorozhkina is Head of Starta Accelerator in the US. Katya Dorozhkina and Alexey Girin are managing US activities of the accelerator,
 and working directly with portfolio companies during the program.
 Ludmila Golubkova and Sergei Vasiliev are based in Moscow responsible for market monitoring and managing accelerator pipeline Eastern Europe.

Reference

Conclusion

While as a simple trading instrument this is a very attractive investment and they are leveraging Waves platform for the ICO shows how robust is Waves as a platform for Crowd funding and raising capital. But there are few concerns I have with Starta:

  • Cross Coin looks more like a shell company for investing into Starta with no added functionality which raises regulatory and oversight issue with the entity.
  • Their focus is on Eastern Europe though Cross Coin is based out of SG so no specific value addition is happening to SG or Startups based out of this region.
  • Apart from a pure investment vehicle there is not much value to the token as neither it is mined or there is any generation mechanism. They represent similar to shares in share market which kills the opportunities in the innovation that tokens and blockchain bring to the table.

Despite raising the above concerns in the context of ICO and investment such tokens and waves platform help to bring various business and VCs onto a funding platform which is crowd sourced and based out of Blockchain which seems to be the promising platform of choice for investment and trading in the future.