The VALID ITO Experience — Reflections from the CEO

Over the past year, ICOs have emerged as a powerful tool for financing innovation. With a well-articulated vision, entrepreneurs can now transcend geographical barriers to garner support from a global community. This was reflected in our own experience while conducting the VALID ITO. Having raised USD 10.73 million, the VALID team is truly pleased and is now hard at work steering the project towards its vision. With 1,585 participants hailing from 69 different countries, the VALID ITO has confirmed that we are working on solving a problem that resonates with a global audience.

While the VALID experience reaffirms my belief that ICOs have led us into an era of unprecedented access to capital for value generating projects, it has also shed light on the dark side of the ICO world which impedes its legitimization. Still slipping under the radar of regulators, several questionable projects continue to raise astronomical sums of money. Behind these projects is an entire ecosystem of actors which promote projects without performing due diligence to establish their legitimacy. Through the course of working on our ICO, we came across a multitude of such actors, some of whom are listed below:

1. Marketing: At the right price, virtually any project can be marketed as a “top 3 ICO” by influential players in the crypto ecosystem. Among crypto news outlets and Youtubers, fees exceeding USD 100,000 for one promotional piece are not unheard of. Other players in the marketing category include ICO rating agencies, dedicated telegram channels, marketing advisors among others.

2. Law Firms: Given the shortage of ICO lawyers, law firms can charge several 10,000 CHF in advance before granting a meeting to entrepreneurs.

3. Exchanges: Post ICO, listing on a prominent exchange can cost over USD 1,000,000. It is amusing to think that listing company shares on exchanges such as NASDAQ and NYSE could cost less.

While the value of these services cannot be disputed, several opportunistic actors charging absurd fees tend to overshadow their legitimate counterparts. The inflated costs of conducting a compliant ICO and successfully marketing a project to a global audience has raised the barriers to entry into the ICO world and defeated the very spirit of a tool which holds the potential to democratize financing.

The VALID Approach

Operating in this environment, it fills us with pride to state that we achieved our objectives through the VALID ITO while staying true to our values. With the objective of setting the gold standard for compliant ICOs, we registered Procivis AG as a member of the Self-Regulatory Organization (SRO) VQF which is supervised by FINMA, Switzerland’s financial market regulator. Our internal legal team was advised by our legal partner FRORIEP to ensure compliance to the highest legal standards. Through the course of the ITO, every participant was required to undergo a KYC/AML process.

Prior to the ITO, we also established a strong policy on marketing, relying primarily on a strategy of organic growth. With a proven company in Procivis to back us, we worked hard on communicating our story and successes through roadshows, social media and media outlets who believed in our vision. Led by our community manager, our real-time engagement through the VALID telegram channel has been labelled by many as the best they have witnessed. Our thought leadership on the topics of eGovernance, data protection and privacy was exhibited through the content published on our blogs.

With a number of quick money investors around, it was also vital that we limited participation in our crowdsale to participants who shared the VALID vision. While this meant turning down several big-ticket participants, we believe that this will protect the interests of the community in the long term.

Following the successful completion of our ITO, we have had a number of interesting projects reach out to us for inputs on conducting an ICO. Having proven that a compliant and successful ITO can be conducted at a reasonable cost, we see it as our responsibility to contribute towards the further legitimization of ICOs by supporting like-minded entrepreneurs. To this end, we are currently working on establishing ICO best practices which can aid other valuable projects in their ICO journey.

On behalf of the VALID team, I would like to thank our community for the overwhelming support and we look forward to realizing our vision together with you.

by Daniel Gasteiger, CEO Procivis AG

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