Singapore-based Cross Coin has stated its intent to release up to 5 million tokens during its Initial Coin Offering, intended to raise between $1.5 million and $5 million investment in a pool of technology startups in the Russian and American project Starta Accelerator. Token costs will be $1, in order to give access to the venture capital industry to a wide range of potential investors. The first $1.5 million raised will be spent on refinancing the 21 start-ups that passed the Starta Accelerator programme in 2016-17, with remaining funds to be spent on investing in the next batch of start-ups.
Starta Accelerator is accelerator program in New York which was started by the Starta Capital Foundation in 2015. The mission of the program is cultural and business adaptation in the USA and integration into the investment ecosystem of technological startups from Russia and the Eastern European countries.
Cross Coin expects a high degree of speculative interest on the secondary market for its venture tokens. Investors will have the opportunity to exit their positions in the startups to obtain maximum profit, and to trade Cross Coin’s tokens on the secondary market to participate in all stages of growth for each of the 21 startups within the investment pool.
Alexey Girin, Head of Starta Accelerator and Managing Partner of Starta Capital, explained: “Investors can put their money on startups that have already passed the initial stages of their development and raised their first investment from various funds, accelerators and business angels. During the Starta Accelerator programme, 21 startups were integrated into the business environment of the United States – the largest and most promising market. Our project is unique in this regard. Investors gain access to a diversified portfolio of actively developed and promising startups in the venture market. I’m confident that our collaboration with Cross Coin will prove a promising format for the venture market, which will be further developed by others in the future.”
News about the purchase of start-ups by strategic investors – ‘exits’, in venture terminology – exercises the most significant influence upon the price of their shares on the secondary market. In this case, the issuer of the Cross Coin tokens will receive a part of the profits from Starta Accelerator from the exit of each of the 21 start-ups, in proportion to its share in the portfolio – 33%. The total amount of income from Cross Coin’s exits, less any administrative expenses, will be directed to the repurchase of tokens at market price.
Additional news triggers for the secondary token market will be as follows: raising a new round of investments by any start-up from the Starta pool; increasing start-up revenue; partnership with major market participants; contracts of B2B start-ups with large new customers; getting start-ups into large accelerators for the next investment stage, and amongst other events.
Head of Cross Coin, Kayrat Kaliyev commented: “The democratisation of venture investment is the primary idea of this project. Exits of the startups in the investment pool will allow the ICO’s participants to receive an income comparable to the level of profitability in the existing venture industry. The secondary aim for the project is the creation of a highly liquid secondary tokens market. This will allow many potential investors to participate in venture financing of projects with a low entry threshold and the ability to exit at any stage of their implementation. Gains in the market price will provide an opportunity to achieve ROI from reselling the tokens. The relatively low initial value of the token is an additional factor that increases its liquidity and attractiveness.”
The company has noted that this ICO has restrictions towards US citizens and the information provided does not constitute an offer of securities for sale.