Blockstack, a New York blockchain software provider founded in 2017, has announced plans to raise $50 million through token sales and will use the US Securities and Exchange Commission's (SEC) Regulation A+ crowdfunding exemption.
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Although this move still requires regulatory review, the sale will enable Blockstack to raise funds through the US securities market through its subsidiary Blockstack Token LLC. The company will sell a token called Blockstack Stack (STX) in a securities offering that is designed to be more flexible than an IPO.
The Regulation A+ exemption under the Employment Act of 2012 (JOBS Act) allows equity crowdfunding activities to offer and sell securities to US investors in two ways within two months, two in two sizes: 20 million US dollars and 50 million US dollars. A company can initiate a Regulation A+ release by submitting a prospectus to the US Securities and Exchange Commission (SEC), and Blockstack officially submitted the prospectus today.
This issue totals 295 million STX tokens in three parts:
- A person who issues 215 million tokens to early tokens, each of which is priced at $0.12;
- Issue 40 million tokens to high net worth investors, each token purchase price of 0.30 US dollars;
- 40 million tokens are used as a non-cash payment method for the App Mining project.
The company said in a press release: "The proceeds from this release will be used to accelerate the development of its decentralized computing stack and application ecosystem."
Interestingly, in a 118-page file submitted by Blockstack, it has sold approximately 323 million STX tokens to 24 qualified investors who are shareholders of Blockstack PBC, according to data from the independent audit firm Foresight Valuation Group. The price of the token is $0.00012 each. According to the submitted documents, in this valuation process, “Foresight used another traditional software valuation method called cost method, which is based on the development cost of the token-based software.”
By issuing new shares to qualified buyers, the team will be able to raise funds from strategic long-term holders at significantly higher prices. If these early investors hold tokens, then on the books, their initial investment may receive a return of 1,000 times (US$0.12/token) or 2000 times (US$0.30/token).
Harvard University Endowment Foundation participates in the sale of this token?
After Blockstack submitted the instructions to the SEC, Morgan Greek founder Anthony Pompliano released a tweet.
“The Harvard Endowment Fund has invested $5 million to $10 million in Blockstack’s token sales. This means that one of the leading university endowments can safely hold tokens directly. Blockstack’s filings with the US SEC are on page 99. Related Information"
Well-known cryptocurrency analyst Joseph Young also said that
“It’s very interesting that Blockstack may be the first token to be sold at the SEC. I think that due to regulatory uncertainty, if Blockstack successfully completes this token sale, many start-ups will follow this regulatory route.”