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March 31, 2017, 08:04:44 AM
Last edit: March 31, 2017, 09:17:36 AM by calvinstm |
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Early thought on Iconomi's latest move:
You can think of the new arrangement this way: Iconomi will continue to play the role of a passive hedge fund investor, while cofound.it will take on the traditional functions of a venture capital firm.
To me, this move does make sense because it'll give "Iconomi the Brand" a bit of needed clarity. one of the problems I identified last month is that Iconomi was doing too many things at once: It was acting as an offshore hedge fund, venture capital firm, and a trading platform. (see my post from Feb. 24th).
Iconomi was trying too hard to be a "Jack of all trades." There is a downside to this approach of lumping every business activities under one name -- 1) it's easy to lose focus and get distracted by the side businesses, and not spend as much effort and energy on what's really making money for your core business, 2) the team might not be as effective because overlapping roles will create confusion to the team members' individual responsibilities, 3) your brand might suffer a clarify issue and will not be appealing to your potential customers. For instance, a startup company might not want to get involved with Iconomi because he thinks that Iconomi is just a digital platform and not a serious, traditional venture capital firm. This is the kind of "brand clarity" issue I'm talking about. This is what having a dedicated venture capital arm like cofound.it can solve.
That's why spin-offs is often needed in the business world - a family of companies held under one umbrella or several complementary businesses that depend on each other co-exist in an ecosystem. Having spin-off companies is usually an indication of starting of the expansion phase. So it's almost always a good thing.
What I like about the Cofound deal is this: Since Iconomi will become a co-owner of the new venture (confirmed by Jan on Slack.. not a small percentage), so a portion of cofound.it's profit will always trickle back to Iconomi. Ultimately, Iconomi will benefit from this new arrangement -- the two companies are complementary and symbiotic in nature - Cofound.it will need the capital from Iconomi for the startups in its incubator program, while Iconomi will have access to insider information on those companies in cofound's portolio. Furthermore, Iconomi will also enjoy any net increase in cofound.it's value.
However, by holding another round of ICO for cofound.it, they will essentially double the pool of resources held between the two companies (explain below).
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Let me help you visualize it ---
For instance, assume the total value of Iconomi's assets (Amount raised by the original ICO + profit from investments in other ICOs) stands at $15 millions USD.
Further assume cofound.it's ICO raise $5 Millions USD (not a unrealistic goal considered the high-profile partners), and Iconomi is a *unspecified percentage* owner. (So we need to subtract $200,000 from
Iconomi's portfolio).
While we do the calculation, please keep in mind that nothing is taken away from Iconomi, and nothing has changed for Iconomi's fundamentals, the fundamentals and core business of Iconomi (digital assets management and ICOs investing) remains the same. So any profit made by the Iconomi platform will continue to flow into the ICN market.
1. However, by having a second team at cofound.it's disposal, we will actually have doubled the manpower between Iconomi and Cofound.it.
2. The total cash held by the two ventures suddenly increase from 15 Millions USD to $19.8 Millions USD ($14.8 Millions USD + $5 Millions USD)! Having more cash and resources at our disposal means we will be able to corner the market and defeat competitors like Melon + Taas .
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People, please do NOT lose sight of the bigger picture -- Our ultimate goal is to corner the Startup (venture capital) market and DEFEAT our competitors! Both Iconomi and Cofound.it will serve as cornerstones in our new ecosystem -- Iconomi will play the role of cash provider, while Cofound.it is the talents finder. We need to get more partners involved and build up the ecosystem. In the past,
Iconomi tried to be "Jack of all trades," and Iconomi Brand had become very confusing. Because of this reason, I think it is an ethical and smart move on Jan's part. I agree with their decision.
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