Well-known cryptocurrency companies, including Coinbase, Kraken and Shapeshift, have been using a little-known investment platform “Bnk to the Future” to raise hundreds of millions of dollars into investors without having to limit themselves to the US market. mud.
Billionaire Richard Branson is one of the early sponsors of the platform, bringing extraordinary benefits to some. According to the Bnk website, about 90 companies funded on the platform received a total of $781 million in funding. By observing the fundraising situation of a particular company on this platform, you can even anticipate its valuation in the regular market one day in the future.
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On May 20 this year, the Norwegian cryptocurrency exchange Kraken began offering shares with a minimum investment of $1,000. Of the total of 12.4 million pounds (15.59 million US dollars), 2,201 investors have subscribed for 10.8 million pounds ($13.49 million).
In 2017, 367 investors purchased Bitfinex's £43 million ($53.71 million) stock; more than its original plan of £40.1 million ($50.8 million).
Then there was ShapeShift, another big exchange, which received £8.2 million ($1.24 million) from just 39 investors in the 2017 round of rounds of financing, easily reaching its goal.
Here are some more examples (we don't always know the number of investors or the specific time of participation, and in some cases, some of the funds raised are not related to Bnk):
The platform works in a unique way and has been carefully designed. Registered in the Cayman Islands, Bnk to the Future is an intermediary between investors and investors. But investors did not directly buy shares in these companies. Instead, Bnk set up highly specialized SPVs (special investment vehicles) as agents of related companies and sold shares on their behalf. Investors can buy stocks of these investment vehicles, and Bnk handles the fundraising matters themselves.
These SPVs are registered overseas and also in the Cayman Islands, so the regulatory restrictions are relatively small. Although SPV investors must comply with the investment laws of their countries – US investors need to apply to become qualified investors – outsourcing the financing process to an offshore company can extend the financing to the global market. According to a person familiar with the operation of the system, funds may even be raised in multiple currencies.
According to Simon Dixon, CEO of Bnk to the Future, Bnk is profitable through the identity of his agent, collecting 5% of the investor's dividends and exit earnings, and another 5% of the funds flowing to the issuing company.
Most people seem to be very happy with the service of Bnk to the Future. Bitrefill spokesperson Sergej Kotliar appreciates the platform – allowing ordinary people to participate in the investment.
“We have thousands of customers and fans around the world who appreciate what we do, and Bnk to the Future lets them participate in financing, while eliminating the administrative burden that many small amounts of money can bring.”
He added that by making users an investor, they can understand their products more intuitively. In contrast, VCs are hard to understand products like users. He said: "They may appreciate the value we bring."
However, some people have experienced a bad situation. A company that had raised funds on the platform had a final capital of 0. The company’s source said that he had expected “large” investors based on the successful sales that the platform had touted before, but was disappointed. However, he added:
“No matter what challenges we face in financing, we can’t blame Bnk to the Future. Fundraising has never been easy.”
From an investor's perspective, investing in Bnk also has its risks. According to Investopedia, SPV allows financial managers to “conceal key information from investors who may not understand the overall financial situation of the company”. The energy company Enron has had a huge negative impact on the abuse of SPV.
Despite the emphasis on inclusiveness, Bnk's compliance activities inevitably narrow the scope of potential investors. For example, a US investor's net worth needs to exceed $1 million, or earn more than $200,000 to buy Kraken's shares. At the same time, Bitrefill directly excludes US investors who need to sign special contracts with US brokers, Kotliar said.
Despite this, the platform has so far raised $781 million, and companies that are not willing to venture into US regulation are still hoping to move to Bnk.