Technology

The rollercoaster-get-rich ICOs of 2017 are over — crypto companies are waking up to the idea that VC investors aren&t so bad after all.

Companies used initial coin offerings (ICOs) to raise some $5.5 billion in cryptocurrency-based funding last year. As an emerging investment system with no regulation, nearly anyone was allowed in.The knock-on effect was that many who rode the wave made huge profits, often into the millions of U.S. dollars, as a 10X return seemed to become the minimum standard among those getting crypto-rich.

The trend went into overdrive in 2018, when the price of Bitcoin hit a peak of nearly $20,000 and Ethereum notched $1,200. ICO funding hit $6.3 billion in only the first three months of the year, as noted by Coindesk, but, fast forward six months and a new trend has emerged. Public ICOs, which allow anyone to invest, are increasingly replaced by a new approach of limited, private sales that consist only of accredited investors and close connections. Many ICOs today include no public sale component, with retail investors forced to wait until a token is listed on an exchange.

Private sale only

Telegramhuge $1.7 billion ICO best exemplifies the change.

ICOs in 2017 began to include a private pre-sale before the ‘open& public sale stage, the idea being to attract big bucks and in some cases give incentives like discounts. But Telegram opted to keep its entire sale public. It also stuck to accepting money from accredited investors in the U.S. — those who are legally certified to make investments — rather than opening its doors to anyone wanting to own a piece of its token sale.

Thata trend that has been repeated in other ICOs, including the recent $32 million &seed& round for Terra and its stable coin project. Terra co-founderDaniel Shin explained to TechCrunch that it will hold a second round of private sale investment, but that&ll be reserved for investment professionals and others in the network.

Legally, of course, this makes absolute sense.

The SEC is steadily increasing its crackdown on ICOs, and it has long been standard for companies planning ICOs to overlook citizens of the U.S, China and often other countries where the legalities are unclear from taking part in the sales. But, actually, the rationale of private sales goes beyond legalities.

Professional investor benefits

The crypto industry has woken up to the reality that getting your capital from a handful of professional investors can be more advantageousthan a bunch of regular people.

For one thing, dealing with a dozen investors is far easier than a Telegram group that numbers tens of thousands. Professional investors are more accustomed to giving a company money and letting it use it independently, but retail investors in the crypto space tend to be more demanding and unrealistic as they seek a quick return on their money. While liquidity is amajor appeal for all in an ICO, VCs tend to hold a longer-term approach than retail investors who look to flip and move to the next money-making opportunity. Or, in times of downturn such as right now, investors have deeper pockets to ride out recessions.

Therea popular refrain that ICOs mean not having to deal with&Evil Venture Capitalists&, but a community of retail investors is demanding in its own way. Plenty of ICOprojects waste time and precious resources putting out mundane press releases that are devoid of news just to produce something that they hope will placate their thirsty community of retail investors, and miraculously give their token a price jump. For example, inking a &strategic partnership& with the American Chamber of Commerce Korea isn&t news — getting actual sales is.

This kind of distraction and allocation of resources makes no sense when you are setting out building a company or aproduct, which ultimately the founders of these projects are doing. As any experienced founder or investor will say, retaining focus is key in those early times.

Added to that, professional investors can actually help with the building by leveraging their network. Whether that is assisting on hiring in the competitive blockchain industry, introducing potential customers —American Chamber of Commerce Korea eat your heart out— bringing on other investors, etc.

Thatwhy in the aforementioned case, Terra opted to bring four crypto exchanges into its private sale — no doubt their influence will be key in building what remains a hugely ambitious project. Other companies that raised large ICOs, including TenX and MCO, have publicly expressed interest in holding new investment rounds to bring in professional VCs. Thatbecause money alone won&t open doors, but often connections can.

To recap: professional VCs can be more trusting, less of a distraction and more useful, but there are some instances in which a more open public approach should be a part of an ICO. Thatwhen it comes to building a community.

The exception: Community

The term &community& has been thoroughly bastardized by ICOs, but there are some projects that — at least on paper — can benefit by allowing specific types of people, people that will use the product, to get involved early.

Huobi, the exchange, developed a token for its users earlier this year, while chat app Line is also minting a token that it hopes will be used as part of its messaging platform. In both cases, neither company held an ICO, but they did use a crypto token to build a community.

Civil, the startup hoping to ‘fix& media using the blockchain, is holding an ICO thatopen to members of the public. Thatalso a community play, as the CVL token will be required to create newsrooms on its platform, and also to interact with them, such as challenging stories written by reporters.

Other technical projects out there are doing the same — focusing squarely on the community they are building for and adopting lower target figures for their ICO fundraising.

The technology space is so vast that there are exceptions, but it is certainly notable that there are relatively few credible projects planning ICOs that include retail investor participation.A report co-authored by PwC shows that the general pace of ICO investing settled in Q2 2018. If you ignore outliers such as Huobi, Telegram and EOS — the $6 billion project that fundraised for a year — then activity has certainly settled down after an explosive 12-months of growth.

Increased stability is likely to mean that the trend of private sales continues. Traditional VCsarelaunching dedicated crypto fundsand those in the crypto space are formalizing investment vehicles of their own, all while the SEC and other regulators across the world intensify their gaze on ICOs. VC capital is likely to play a more pronounced role in funding ICOs than ever before.

Thatnot to say that the retail investment phase is over. Speaking at TechCrunch Disrupt last week, Coinbase CEO Brian Armstrong sketched out his vision of the future in which all company cap tables are &tokenized.&

He foresees retail investors across the world being free to invest in security tokens that operate as a more accessible offshoot to traditional investment systems like the New York Stock Exchange, the NASDAQ etc. Whether that extends to participation in ICOs themselves remains to be seen.

Coinbase CEO Brian Armstrong believes retail investors have a big future in the crypto market

Disclosure: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Confrere, a video calling service designed specifically for professionals who need to hold online consultations or meeting with clients, has raised $1.5 million in seed funding.

Leading the round is BerlinPoint Nine Capital, with participation from Nordic Makers, The Nordic Web Ventures, and Fathom Capital. A number of angel investors also took part in the round, including Albert Armengo (the founder of Doctoralia, sold to Docplanner), as well as a number of physicians who are users of the product.

Notably, Confrere was co-founded by CEO Svein Yngvar Willassen, who previously founded and headed up appear.in, another video calling service but one designed for team collaboration. The startupother co-founders are CTO Dag-Inge Aas and CPO Ida Aalen.

&I knew from my time with appear.in that meetings between professionals and their clients were a different use case than team meetings,& Yngvar Willassen tells me. &Appear.in and other current video tools do not serve that use case well. I found that it would probably be better to make a new service for this&.

Thatbecause a typical professional receives many client calls after another, and this also makes it awkward to use typical room-based systems like Zoom or appear.in. &In addition, of course, needing to download and install an application is out of the question. It needs to run in the browser, also on mobile phones,& says the Confrere CEO.

To that end, ConfrereUX is tailored for professional-client calls, and enables professionals to receive multiple clients after each other without the risk of clients bumping into each other. It works in the browser on Android and iPhone; you simply send a link or add a button to your website to start receiving calls. In addition, Confrere offers an API that makes it easy for other SaaS companies to add video calling to their offering.

&The largest group [of users] are professionals like physicians, therapists, tutors, recruiters, lawyers and so on. Basically, everyone who spends a lot of their day meeting their customers or clients in their office as part of their business. We believe all of these businesses have the potential to work more efficiently by utilising video communication with customers,& says Yngvar Willassen.

Adds ConfrereAalen: &The fact that you can brand your video calls, charge for your services over video, and where itsuper easy for the end user to enter the video call… is simply not something anyone else is doing. Some might say ita niche market, but we believe ita market with huge potential. There are so many professions that typically have 1-1 meetings with their customers, clients or leads, and many of them could have been done on video instead of meeting face to face. We&re creating a new market&.

Apple is holding a keynote today on its new and shiny campus in Cupertino, and the company is expected to unveil new iPhones, an updated Apple Watch and maybe some other things. At 10 AM PT (1 PM in New York, 6 PM in London, 7 PM in Paris), you&ll be able to watch the event as the company is streaming it live.

AppleSeptember is the companymost anticipated event. And thatbecause Apple releases new iPhone models every September. Rumor has it that the company should unveil three new devices, including an updated iPhone X, a bigger version of this phone and a new model to replace the iPhone 8 with a notch design.

If you have an Apple TV, you can download the Apple Events app in the App Store. It lets you stream todayevent and rewatch old events. The app icon has been updated a few days ago for the event.

And if you don&t have an Apple TV, the company also lets you live-stream the event from the Apple Events section on its website. This video feed has always worked in Safari and Microsoft Edge. And just like this yearWWDC keynote, the video should also work in Google Chrome and Mozilla Firefox.

So to recap, herehow you can watch todayApple event:

• Safari on the Mac or iOS.
• Microsoft Edge on Windows 10.
• Google Chrome or Mozilla Firefox on the Mac or Windows 10.
• An Apple TV with the Apple Events app in the App Store.

Of course, you also can read TechCrunchlive blog if you&re stuck at work and really need our entertaining commentary track to help you get through your day. We have a big team in the room this year.