Starta Accelerator and Cross Coin launch ICO for diversified portfolio of tech start-ups.
The initiative aims to democratise venture capital funding by enabling anyone to invest in 21 early-stage tech companies — also allowing them to exit and trade their investment using a blockchain token.
Cross Coin will launch its crowdsale next week.
Venture capital is traditionally the preserve of the wealthy and well-connected, with investors typically requiring six- or seven-figure sums to access the best opportunities. The companies, which are usually at an early and rapid-growth stage, are illiquid, and the aim is for VC money to find an ‘exit’ — a sale when the company goes public, typically at a multiple of 10 or 20 times the initial investment.
Starta aims to bridge the gap between ordinary investors and VC opportunities by using the blockchain.
Cross Coin, a Singapore-based company, will take a stake in the 21 companies in the Starta Accelerator using funds collected in the crowdsale in return for tokens on the Waves blockchain. Starta’s model is to train and equip these companies to break into the lucrative American market, where they can gain customers, expand and acquire new buyers. When an ‘exit’ is achieved, the profits will be used to buy back Starta tokens from the open market, driving up the price.
The project represents a hybrid between old and new forms of investing, and has been described as the future of venture capital. It leverages the cutting-edge technology of the Waves blockchain with the most rewarding but exclusive forms of investment in the traditional financial industry. It is not only far more accessible but more flexible than existing VC arrangements, since tokens are tradable on the Waves DEX and other supporting exchanges even before a formal exit is achieved.
Starta learned about blockchain technology through one of the companies in its current Accelerator group. Alexey Girin, managing partner of Starta Capital, explains how they came to the decision to launch an ICO. ‘Firstly, there is a company in our portfolio that builds businesses on the blockchain, iCoinSoft. Secondly, we follow the most promising trends on our own initiative, and it’s clear that blockchain is just such a trend.’ A third factor was a chance meeting with Kairat Kaliev, a key partner, at a conference some months ago. ‘We discussed the problems facing Eastern European startups, including the issue of financing. Since Kairat works in fintech and is familiar with IT, he suggested raising money that he would then invest in us via an ICO.’
Starta aims to raise at least $1.5 million to refinance the 21 start-ups in the current tranche of companies in its Accelerator. The crowdsale is capped at $5 million, and if there is appetite for additional funding above $1.5 million, it will be used to fund a new group of start-ups.
The Starta ICO will launch on 4 July. For more information or to participate in the crowdsale, visit www.StartaICO.com.