Why an ICO for Trecento Blockchain Capital?

by Sothira NGAUV, Chief Analysis Officer of Trecento Blockchain Capital

WHAT IS TRECENTO BLOCKCHAIN CAPITAL?

Trecento Blockchain Capital is an all-in-one Blockchain-centric investment solution.
Our objective is to capture the best investment opportunities driven by the Blockchain revolution by offering a simple and trustworthy investment partner. Thus, Trecento Blockchain Capital will launch four thematic funds covering the full investment cycle of Blockchain companies.

Based in Geneva, Trecento Blockchain Capital is managed by a team of experienced asset managers and Fintech experts, within a safe and regulated environment.

Trecento Blockchain Capital has launched its ICO with a fundraising target of € 20 million. The proceeds will be used to finance the development of our infrastructure and activity and support the long-term growth of Trecento Blockchain Capital.

Do not miss this opportunity! Bonus up to 30% are available now! More information on our website: https://ico.trecento-blockchain.capital/

THE BOOM OF ICOs

Initial Coin Offering (ICO) and Token Generation Events (TGE) constitute a new method of fundraising half-way between a traditional IPO (i.e Initial Public Offering) and a Crowdfunding campaign. Unlike traditional funding options, a ICOs do not require the companies to share equity with the participants.

Even if the level of cumulative ICOs is still relatively low compared to the “traditional” IPOs and Crowdfunding amounts, ICOs are getting more and more traction within the Financial Industry. The latest to date, EOS.io, which has raised more than US$ 4.15 bn for its new platform Block.one, shows that the interest from crypto traders and investors is increasing in dramatic fashion.

Figure 1. Cumulative ICO size ($mn). Source(s): Coindesk

Figure 2. Evolution of the number of ICOs launched and average ICO size ($mn). Source(s): CoinDesk

Figure 3. ICOs by Sector & Industry in 2018. Source(s): CoinDesk, CoinSchedule, Trecento Blockchain Capital.

FASTER, CHEAPER

Since an ICO is a decentralized operation without a central authority which validate it, they are able to launch mmur more quickly than a traditional IPO. First, IPOs require a lot of documents, starting with a complete and long compulsory prospectus, usually a 400–500 page long book that has to be validated by the local Financial Authority. For instance, in the case of a listing on the Main Market in United-Kingdom, the FCA (UK financial authority) requires the company to provide numerous documents aside from the prospectus: An eligibility letter and a sponsor’s declaration, a completed application for admission of securities to the Main Market, any approved supplementary prospectus, a copy of the issuer’s board resolution allotting the securities, a completed shareholder statement, a completed pricing statement, a statement of the number of shares that were issued and potential other documents post-ICO.

Furthermore, companies must meet a certain number of criteria before having the possibility of listingtheir company on the Stock market. For example, on the NYSE Euronext’s (the main European regulated market), companies must distribute a minimum of 25% of their capital, or 5% if they make at least €5 million. They must provide three years of audited accounts (which limits the IPO-option for Blockchain startups, since no products, services, nor track record or existing revenues exist)

Before raising funds through an IPO, startups should compare the different costs related to each type of fundraising operations. In the case of an IPO, the main expense is the IPO operator’s commission (usually investment banking) which can charge you a fee of around 5% of the funds raised (depending on the range of the fundraising target). Additionally, other expenses need to be forecasted and included in the budget: Auditor, Lawyers, Marketing expenses, events, Listing fees, etc.

In terms of “Standards” of practice, an ICO process requires primarily non-binding documents like a a White Paper that replaces the prospectus and which contains, at least, the description of the project, the products and services being offered, a presentation of the team and advisors, the terms of the ICO, the use of proceeds, and a roadmap.

For an ICO, all the work can be done internally (even if it’s now highly recommended to not overstep legal nor audit considerations). Finally, an ICO can be done with “only” marketing expenses.

Private fundraising with Venture Capital companies can also be an alternative, but it can take time with the Due Diligence requirements: Investor pitch documents, Organizational documents, Management & Organization Information, Intellectual Property, Development plans, Products & Services documents, Financial Information, etc.

A LOT OF FRAUDS AND SCAMS, BUT…

Several financial authorities from developed countries have alerted investors to the risks related to these ICOs, since there a clear, comprehensive, and internationally harmonized regulation framework has not been yet built. And these institutions are right…

Since most existing crypto hedge funds are based in exotic locations, they have no obligation to comply with ethical standards or rules regarding conflict of interests, which will not be the case for Trecento Blockchain Capital. Despite a lack of regulation, we will adopt a strict Risk Management, Compliance and Security Policy all in an effort to protect our investors.

In the off-chain world, asset management is regulated for a good reason: the protection of the final client against manipulation, fraud, Ponzi schemes or any kind of fund manager misconduct. A growing number of countries have already produced legislation on cryptocurrencies and crypto hedge funds and there is a potential risk to Blockchain hedge funds, which have not taken this into consideration.

Today, the market is mainly populated with individual investors, while some of the institutional investors refrain because of the volatility/lack of liquidity on exchanges and regulatory uncertainty. We think that this is going to change as the market grows, becomes more disciplined and more regulated. We are really convinced that the number of dedicated hedge funds and institutional investors will rise sharply in the future.

Due to these issues, Trecento Blockchain Capital wants to demonstrate that ICOs and related-projects can be executed by a serious and proven asset management company. Trecento Blockchain Capital aims to provide both individuals and institutional investors with a straightforward and profitable investment solution, relying on our 4 investment funds (VC, ICO, FoF, Crypto Trading and Arbitrage). Our company will operate within a safe and regulated environment in Geneva, supported by the Republic of Geneva and regulated by FINMA.

A MATTER OF CONSISTENCY

Trecento Blockchain Capital plans to launch a comprehensive investment solution through four funds, including one ICO fund. What would be better than using Blockchain to understand how it works? Launching our ICO is a matter of showing solidarity with the industry we wish to penetrate. For instance, Token Sale & Token Distribution will be accomplished using the Blockchain technology.

AN INVESTOR BASE “ACQUISITION”

The large majority of Blockchain startups raise funds through this new method. One of the main reasons they use the ICO method comes from the fact that these companies need to build a network of important users and a sustainable and efficient ecosystem. Thus, they sell (or we should say “Pre-sell”) their ongoing project or idea (the success of an ICO is not necessarily based on an existing product, as it can be the case for another “traditional” fundraising operation) by issuing tokens in exchange of funds for their development.

Doing our ICO is a great opportunity to build an investor base since our Token (TOT) offers large discounts on fee structure of our funds.

During Blockchain events, roadshows and online with the ICO campaign, we meet potential ICO investors and/or Trecento Blockchain Capital’s funds investors (pre-marketing), potential partners or services providers and also our competitors.

Ultimately, to be assessed by the Crypto/Blockchain Community is a good place to start our venture ..

TOKENIZATION

With Blockchain and the possible “tokenization” of funds Economy, individuals are invited to participate in the global financial ecosystem and startup fundraising campaigns through ICOs. Trecento Blockchain Capital wants to be part of this Industry transformation by proposing simple financial products to both individuals and institutional investors.

FINANCIAL CONSIDERATIONS

There are of course Financial considerations. As mentioned before we plan to raise €20mn, a hard cap level that Trecento Blockchain Capital estimates as a good and fair amount to set up its activities and deliver returns in the best way possible ( for more details, download our Whitepaper).

Figure 4. Trecento Blockchain Capital — ICO Milestones. Source(s): Trecento Blockchain Capital.
Figure 5. Use of Proceeds. Source(s): Trecento Blockchain Capital.

WHY OUR ACTIVITY IS NOT CHEAP?

Asset management is a demanding environment: it requires numerous and recurring activities to be performed efficiently, and asset managers must abide by an internationally-compliant framework.

As we aim to become a lasting and prominent investment actor and business accelerator in the Blockchain world, there are a couple of prerequisites we must meet:

1 / Working in a regulated and OECD-compliant environment

At Trecento Blockchain Capital, we want to deliver high returns to our investors, in a safe and regulated environment.

We have chosen not to be incorporated in a tax haven country because transparency and ethics are part of our DNA and core principles. Moreover, Blockchain is a powerful technology that can help ensure transparency and reliability, qualities that we are dedicated to developing.

We believe that our investors and our community are our partners, and that they are entitled to full transparency regarding the fund performance and the use of their investments. We will ensure the highest levels of transparency thanks to Blockchain technology, coupled with the support of 3rd party reviewers and auditors. But, transparency, compliance, and regulation are not free, and they naturally induce recurring costs.

2 / Getting the best of class team to generate returns

Delivering investment returns is not straightforward. It is a complex task, requiring specially honed talents , professional experts, and financial leaders with robust track record.

At Trecento Blockchain Capital we want to hire the best people. Experienced and talented staff is expensive. But that is the price to pay to get strong returns and to generate substantial upside. This is the reason why we need management fees: management fees are the fuel of an investment company. Thanks to them, the team can be fully focused on delivering returns.

3 / Developing the Blockchain ecosystem

Becoming a structuring and sustainable actor in the Blockchain industry is our ambition. We establish our project with a long-term perspective. We want to develop a real and lasting Blockchain ecosystem through our funds and community platform. At Trecento Blockchain Capital, we are here to stay and to thrive internationally.

This is the end. Thank you for your time and attention.


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