CoinList, The Godfather of Filecoin’s $257 Million ICO, Heads Out As An Independentbr>
CoinList is an organization dedicated to facilitating compliance and other technical issues on vetted initial coin offerings, and was the platform behind the $257 million Filecoin token sale, the largest initial coin offering to date.
The company is now independent after being incubated by AngelList, the funding platform that connects startups to investors, and Protocol Labs, which, as the name suggests, creates Internet protocols.
Today, CoinList announced that Blockstack will be its first ICO sale since becoming an independent. The deal will help Blockstock obtain the funding to build out a protocol where users own their own data and apps run locally without remote servers. The registration period starts Nov. 1, with the main sale kicking off on Nov. 13.
CoinList CEO Andy Bromberg talked with Block Tribune about plans going forward.
BLOCK TRIBUNE: Give me an idea about how the independent company came together.
ANDY BROMBERG: CoinList is a new independent company. We work very closely with AngelList and Protocol Labs, obviously close to a number of different partners, but those two primarily. This came about as a result of the Filecoin sale a few months ago. At that point, CoinList was being operated as a collaboration between AngelList and Protocol Labs. They made the decision that it really made sense for it to be its own independent company. We just completed, recently, the spin-out there, so CoinList now stands alone with both of them as stake holders of the company and very close partners moving forward.
BLOCK TRIBUNE: Wasn’t there a problem with the Filecoin ICO at one point?
ANDY BROMBERG: They had some minor, kind of technical front end glitches, but nothing major and nothing that actually affected the proceeds or anything like that.
BLOCK TRIBUNE: Okay. So whatever glitches there were, I take it, have been resolved?
ANDY BROMBERG: Oh, absolutely, yeah. We’ve rebuilt the whole platform from the ground-up to really support scalability and with an eye towards making sure we can support whatever the needs of new token sales are.
BLOCK TRIBUNE: Really? You’ve rebuilt it from the ground up? That’s like if a window doesn’t open in the house, you’ve rebuilt the whole house.
ANDY BROMBERG: You know, we think there’s no such thing as being too careful in this space right now when you’re dealing with cryptocurrencies, and when you’re dealing with such tight security, it’s really important that any incoming team has the full knowledge of systems of which they’re operating. That was important to us as we built the new team that we made sure all the infrastructure was just the way that we wanted it.
BLOCK TRIBUNE: Was Filecoin the first ICO that you had worked on?
ANDY BROMBERG: That’s right, yeah. So you know, as a result of CoinList kind of emerging out of that collaboration there, yeah, the CoinList that was built initially to facilitate specifically the Filecoin ICO, then spun out from there, and now working on upcoming sales.
BLOCK TRIBUNE: What was it like when the results started coming in on Filecoin? You know, you eventually did over 250 million. Were you guys sitting there and slapping your foreheads, can’t believe it’s taking off like this? Tell me what the atmosphere was like in the room, so to speak.
ANDY BROMBERG: Oh, yeah, it was amazing. For us, we had high expectations with the Filecoin sale. We really thought it was going to go off really well and be able to pull in a lot of capital from a great set of investors. At the same time, nothing really prepares you for that. Watching those numbers tick up and the capital roll in was amazing. Particularly for us, I think, watching the number of investors pick up and just how many stake holders were interested and wanted to own a piece of it, was really gratifying.
BLOCK TRIBUNE: What makes an ICO something that appeals to the broad community of investors? Do you have any philosophy on that?
ANDY BROMBERG: I think it really comes down to all the core pieces that are important. A compelling team, a compelling high level vision, thoughtful sales structure and governing structure, a strong community. I also think that a really important piece of many of the ICOs that appeal to a really broad set is some application that feels usable to those investors, even if it’s just one of many pencil applications on a new protocol. The idea that there’s something where they can actually imagine use of a token, I think that’s what gets a lot of people into these sales. They’re looking at it and they’re saying, “Alright, this sale is valuable. I think the team is great, the community is great, government structure is great, I’ve done my technical diligence on most of the white papers, I understand it all. Then on top of that, ‘Wow, I can actually imagine using this a year from now for this specific application.’ That really gets people fired up to be a stake holder in the network.
BLOCK TRIBUNE: What is your intake process for an ICO?
ANDY BROMBERG: Yeah, I’m glad you asked that. We have two services right now. One is a service called Comply API. This is a white labeled compliance solution to the service. If you’re running a sale on your own site, not on the CoinList site, we can provide KYC, AML, and accreditation services to the sale in order to make sure that you’re complying with whatever relevant legislation there is or regulations there are. For that service, our intake process, come and talk to us, email us, we’ll talk to you, we’ll get you set up, and we’ll get you up and running. We want to work with as many sales as possible there. We think it’s important with most to strike an opinion on any of those components applied to any specific sale. We think that every sale should be operative compliantly as possible in doing whatever their accountant says they should be doing to make sure that they’re staying within the bounds of the law. That service is offered pretty widely.
On the other side, for our wholesale facilitation service, we would have an extensive diligent process involving our Technical Advisory Committee as well as our Market Advisory Committee. Those two groups are composed of many of the leading cryptocurrency investors, developers, market luminaries, and we chat with them and understand their thoughts on a token sale. If we get affirmative advances from our committees, we are willing to put the sale up on our site and actually help them list it. That is for a very small set of tokens where we really vetted the projects closely. Of course, we encourage investors and everyone to do their own due diligence, make their own decisions. But we want CoinList to be a place where you’re doing that diligence and making those decisions based on a small set of vetted high-quality token sales that really narrows down the field from the hundreds out there that are not as high-quality.
BLOCK TRIBUNE: What is your percentage of turn-aways?
ANDY BROMBERG: It’s tough to say. We get a lot of in-bound drawer application pipeline. There are some out there that just barely miss the cut and some that are more obviously not a fit. It’s a high percentage of turnaways. We allow a very, very small set of token sales on the platform.
BLOCK TRIBUNE: What’s the differentiation between your service and the handful of other companies that are mining the same field?
ANDY BROMBERG: I think there’s a number of pieces of differentiation. For us, there’s a real focus on the compliance piece, on making sure that the KYC and all the accreditations are in proper accordance with best practice and due diligence on those. I think that other folks don’t have as much of a focus on really nailing that side of the equation. On top of that, we have the ability to accept US dollars and fiat currency in addition to cryptocurrency, which is a big value out there. Then I just mention the CoinList community that we have, an incredible set of investors from sales that we’ve run or compliance services that we’ve run and being able to market to those investors that are already interested and have already demonstrated a willingness to participate in token sales is a big differentiator there.
BLOCK TRIBUNE: Have you noticed much activity from the US Securities and Exchange Commission regarding ICOs? Have they ramped up their contact with you or anything along those lines?
ANDY BROMBERG: Yeah, I don’t have any comments with their specific level of contact with us or other parties. I will note that they recently spun-up a new cyber division where part of that new division mandate is actually to look at new laser technology and block chain technology and try to understand it more clearly. Certainly they’re starting to release some more materials publicly on their thoughts on the matter.
BLOCK TRIBUNE: Going forward over the next few months, how many ICOs are you going to be handling?
ANDY BROMBERG: On compliancy, I have many, many, probably dozens of token sales over the coming months with our compliance service, if not more than that. On the full sale flotation it’ll be single digits, just a very limited set of only the best sales that are happening. That’s certainly our goal to keep that number, not keep it low, but to keep it to only the best and maintain our rigorous standard for token bills to be accepted there.
BLOCK TRIBUNE: What is your revenue stream out of these ICOs?
ANDY BROMBERG: We charge a compliance fee for services that run through [inaudible 00:08:55] and then for the full sale facilitation, we work through finding ways to help them in line interesting. So we end up taking a percentage of the sale typically.
BLOCK TRIBUNE: Filecoin obviously was a raging success. There are some ICOs that are less successful. What’s the difference between them? Is it the technology that’s being touted? Is it the marketing? Is there some other factor?
ANDY BROMBERG: Yeah, it’s always hard to say. There’s a ton of factors at play. One of the things that I would flag for Filecoin is part of why it was so successful was the community it was built around it. It’s not to say it’s the only factor, there’s a lot at play, but they had built a great, very active, very engaged community. When you’re on the token sale, you need people to rally around the cause and support the project. I think that made a big difference to them. On top of that, just a stellar team, really thoughtful about the technical details behind the project. It appealed to a wide set of people.
BLOCK TRIBUNE: Will you have your own ICO and will you handle your own compliance, etc. if you are?
ANDY BROMBERG: CoinList has no plans to do an ICO at this point.
BLOCK TRIBUNE: Okay. Why is that?
ANDY BROMBERG: We have yet to see a compelling reason for us to do an ICO. We’re focused on building product and selling products. I think, at this point, doing one would be a distraction for us.