CoFound.it Token Sale: A tokenized startup accelerator - Smith + Crown

CoFound.it Token Sale: A tokenized startup accelerator

Cofound.it is a token sale (ICO) accelerator that aims to grow into a platform for crowdsourcing token sale services.

The Cofound.it token sale ended on June 6th, 2017 after raising 55,565 ETH, worth approximately $14.8 million at the time of the sale conclusion. The project never reached its public token sale, slated for June 7th: all funds were raised in an exclusive pre-sale for members of cofound.it’s Priority Pass program, which gives members exclusive early access to project token sales.

Project Overview

Cofound.it is a token sale (ICO) accelerator that aims to grow into a platform for crowdsourcing token sale services. Cofound.it will work directly with project teams to develop tokenized products and services and fund them with a token sale. As they deepen their expertise in the process, Cofound.it wants to build an open marketplace for token sale service providers, such as PR companies, blockchain developers, community managers, legal advisors, and due diligence investigators. In the short-term, the core team will focus on tokenization and business strategy while relying on several partners, including Wachsman PR, to help teams launch sales. They have three physical accelerator locations, with a fourth planned, and three projects already signed with an additional four projects that are close to signing. They hope to complete a total of ten projects by the end of 2017.

Cofound.it hopes to address several challenges in the current token sale industry.

  • A perceived lack of business acumen among token sale projects: In their view, many projects have excellent technical foundations, but lack the business experience to accelerate growth. Cofound.it aims to add business expertise to existing technical expertise they see in many blockchain projects. Their initial intake, evaluation, and coaching process focuses on business models, go-to-market strategies, and coherent product roadmaps, among others.
  • Preparing projects for token sales and surfacing quality projects: It is notoriously difficult to identify quality projects in the token sale marketplace. It is one reason we (S+C) perform open research on individual projects and the market. If Cofound.it becomes a trusted filter of projects, similar to the role high-profile accelerators play in the venture capital industry, they could provide signals to potential token sale participants.
  • The difficulty of managing token markets: Managing post-token sale investor relations in the context of a fledgling, highly liquid token market is a challenge unique to tokenized startups. The token sale community has different expectations around progress and communication than a typical angel investor. Cofound.it want to help projects navigate this difficult and relatively uncharted period.

Ultimately, Cofound.it hopes to unbundle venture capital by creating an open market place where investors looking for opportunities and entrepreneurs looking for funding can find one another. In the short-term, their work with the accelerator will focus on preparing projects to launch a successful token sale.  In the long-term, their work will focus on opening up the process to a broader user group. Their vision of the marketplace is one where entrepreneurs don’t necessarily need cofound.it as mentors: they can seek mentors and service providers in an open market. The cofound.it team will transition to be a premier service provider and focus on building out the technology.

Role of the Cofoundit Token (CFI)

CFI is an Ethereum meta-token designed to be used by all players in the system.

  1. Entrepreneurs will need Cofound.it tokens to stake as escrow when they on board to the system. While entrepreneurs are encouraged to pay service providers in project tokens, they can use Cofound.it tokens for compensation before project tokens exist.
  2. Service providers will need Cofound.it tokens to stake as escrow for starting to use the system and bid on projects. This includes both professional services to entrepreneurs and research and evaluation services to the community.
  3. Potential investors and other users will use tokens to access new features, such as due diligence about projects, cross-industry research, and data from Cofound.it analysts. They can also use it to access special pre-sale deals or premier token sales.

The exact amounts for staking and the service pricing haven’t been defined yet and the team plans to define these parameters iteratively as the economy unfolds. In the short-term, as the team focuses on finalizing the accelerator process, the tokens will play a lesser role in the platform.

A Cofound.it authored overview of the token can be found here.

The distribution of CFI tokens is as follows. Only 25% of the tokens will be offered to token sale participants. 20% are reserved for the current and future team, including advisors. 10% will go to ICONOMI, which incubated Cofound.it, though there is no longer a formal relationship between ICONOMI and Cofound.it. 20% will go to Cashila, a European bitcoin payment processing service and the progenitor of ICONOMI, for purchase of their assets: technology, IP, and user base. On June 1st, 2017, Cashila announced they will suspend their retail operations.

State of the Technology/Solution

Process as a product: The team sees Cofound.it as primarily a process innovation rather than a technology innovation. That is especially true for the early stages, where Cofound.it operates more like a traditional accelerator (Y-combinator) for token sale projects. Expertise and network are the key elements. They hope to turn this expertise into a repeatable process, ultimately one that can be reliably tokenized and developed into an open platform. However the exact process hasn’t been finalized yet: the initial projects will help them develop this.

Here is where Cofound.it stands so far:

  • Defined major service providers to help projects launch sales, including Wachsman PR, Deloitte, Agentic Group, and Novak Rutar.
  • A defined evaluation process for identifying high-potential projects. This includes interview,  face-to-face workshops, and a legal review, though they encourage teams to secure their own legal counsel.
  • An existing project pipeline of three signed projects, four close to signing, and three more potential participants. These projects have not been identified or verified yet though.
  • Existing accelerator locations in Sweden, Central Europe, and Taiwan, with a planned location in New York.
  • Implementation of smart contract payments will wait until after their process and the internal economy are better defined.
  • The technology for the open marketplace has not been developed

They no longer have any formal relationship with ICONOMI. They will be using Cashila’s technology for actually launching token sales and eventually accepting fiat payments.

Who is the team behind the project?

The team is led by Daniel Zakrisson and Jan Isakovic. Daniel is well known in the community for his evaluations of token sales and as the former Head of Investment Evaluation of ICONOMI. Jan was the former Mentoring program lead at ICONOMI. Their CTO and blockchain developer is Erika Pogorelc, although the heavy lifting of designing the smart contracts for the service provider marketplace is further along down the roadmap. Advisors include William Mougayar, a commentator and author in the blockchain industry.

They have several partners who will serve as the initial service providers. Deloitte will provide optional market research and validation. Wachsman PR, a well known PR agency in the blockchain industry, will provide PR for token sale projects. NovakRutar–a Slovenia-based law firm–will provide legal evaluation and optional counsel to token sale projects. Agentic Group–a firm offering strategic consulting in the blockchain industry–will also provide services. Agentic doesn’t have a deep digital footprint in the blockchain industry, but they have been mentioned as a membership-driven consortium of 36 blockchain and digital currency related companies.

Project Details

Incorporation status: Not yet incorporated
Team openness: Fully transparent
Blockchain Developer: Erika Pogorelc
Technical White Paper:       Not available
Available Project Code: Not available
Prototype: Not available (of the technology solution)

Token Details

Role of token: Access and Contribution Rights
Token supply: 500 million
Distributed in ICO: 125 million
Emission rate: No new coins created
Blockchain: Ethereum
Consensus method:        Proof of Work

Sale Details

Sale period: June 7th, 2017 to July 7th, 2017, with a private pre-sale for Priority Pass members starting on June 4th, 2017
First price: proportional to participation
Accepted currencies: ETH
Investment Round: First public offering
Token distribution date: 2 weeks after crowdsale
Min investment goal: $1 million
Max investment cap: $12.5 million
How are funds held: Smart contract
Minimal Viable Product:        Q3 2017
Bonus schedule: No Bonus

Official Resources

Update: An earlier version of this article did not explain the Priority Pass program that gave members early and exclusive access to the token sale. This was a detail we overlooked and apologize to users.