Having come together at 500 Startups, 30 companies from around the world have banded together for an innovative new investment model, based on tokens.
It’s the new hot-button topic that could be a gamechanger for startups and investors in 2018. Building on the increasing excitement around cryptocurrency, Initial Coin Offerings (ICOs) are emerging as an alluring way for early-stage startups to raise capital and free themselves of the usual limitations of traditional venture capital.
One group of tech startups is already diving head-first into what could be a revolutionary new source of investment. Comprised of 30 companies from over 14 countries that were part of 500 Startups’ summer 2017 program, the 22X Fund is an ICO offering investors the chance to own between 2.5% and 10% equity in each of the companies, which include Dubai-founded subscription software startup, ShortPoint.
Though by their very nature they come with uncertainties, ICOs are being hailed as an innovative fundraising technique that will allow participants of the 22X Fund to take a stronger hold of what many believe to be a much more democratic fundraising process.
But how does it work for investors?
After satisfying particular accreditation criteria, investors can subscribe in any currency, be it traditional or crypto, from which they will then receive a 22X Token. As the 30 startups grow, investors will receive proceeds from exit or IPO – and they can even trade the token.
Token sales will be handled by another startup, Securitize.io, which will facilitate the purchase and transfer of tokens, acting as an investment manager and advisor of sorts.
Aiming to raise $35 Million, token pre-sales began on January 26, with a statement explaining that the funds will be deployed immediately and invested on a pro-rata in the equity of the 30 participating companies. The main event sale will take place between March 9 and March 23.
You can find out more on the official 22X Fund website.
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