STARTUPS

ICO boutique

Memorandum Capital, a Russian investment boutique, has been operating for under a year. It has nevertheless established cooperation with two hundred investors. This consulting project assists investors in finding promising startups which employ blockchain technology. As in any other line of business, there are risks in the ICO (initial coin offering) market, which only professionals can assess. That is the niche for Memorandum Capital. The project participants have been involved in transactions amounting to over a billion dollars. The boutique’s services have been used by such startups as Finolog, Papyrus, GenX, Buddy and a further dozen ICO projects.

The blockchain technology which has gained popularity over the past few years, has brought to existence numerous startups employing crowdsale for attracting funding. For an investor who is interested in this dramatically expanding market but lacks special expertise, it’s often hard to sort the wheat from the chaff, or jewels of the cryptoindustry from the secondary and at times even fraudulent startups.

Memorandum Capital provides advice and support to investors assisting them in understanding the specifics of blockchain projects. The investment boutique also cooperates with startups and helps them with documentation required for arranging ICOы and with choosing proper financial models. It in fact acts as an underwriter in a traditional IPO. Due diligence is also performed (an independent audit and assessment of the investment). Memorandum Capital’s specialists filter out plenty of potential candidates. They review somewhat 400 blockchain startups a month while start promoting just three or four. Apart from startup developers, Memorandum Capital performs screening of investors as well to make certain investors have experience of financial dealings and a clear understanding that any venture investments bear risks. But the investors disposed to engage with startups at their earlier stages are offered advantageous terms and discounts.

Memorandum Capital’s revenue is sourced from the fees for the deals accomplished.

The company arranges meetings between startupers and investors and helps establishing their long-term relationship. It also provides legal support for their interaction. The investment boutique on a regular basis informs investors of the current situation in a startup at every stage of its implementation. Startupers are offered full media support and promotion. They are also assisted with presentations and drafting marketing documents. Road-shows are arranged for investors in various countries such as South Korea, Singapore, Hong Kong and Australia, where business communities are keen about blockchain projects.

For the near future, Memorandum Capital intends to raise external investments to bring its capitalization to $1 mio. According to the investment boutique’s founders, the cryptoindustry enthusiasts who made big money on the bitcoin boom are now replaced by investors who have had experience of funding classic startups. Ivan Alexandrov believes that distinctions between an ICO and a traditional IPO will gradually disappear, through regulation adjustment among other factors. Owners of tokens will be able to exercise influence on startups through DAICO (Decentralized Autonomous Initial Coin Offering) which brings additional decentralization and autonomy to ICOs. Smart contracts will for instance limit startups financing by a set amount at every stage of the project implementation. In DAICO, developers get their money in installments, so if anything goes wrong, investors can always terminate payments.

Memorandum Capital’s managing partner believes that business reputation of the cryptoindustry which is full with easy money, will be restored through new market standards. The company plans to take an active part in designing such standards.

By Christina Firsova

 

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