There is an SEC requirement to start the sale within two days of qualification. We opened our sale on July 11th on stackstoken.com.
It’s exciting to be the first token offering in U.S. history to receive SEC qualification. This offering is unique and different from typical “ICOs”. In this post and video, we highlight how this offering is different. We also answer some frequently asked questions.
How is this different than a typical token offering?
- Our communication is not as simple as for other sales. Doing a Reg A offering means we’re abiding by U.S. securities laws. The securities laws protect investors by requiring full and accurate disclosure. The level of transparency required means everything we say must be true and consistent with our SEC filing. Whereas you might be used to quick, off-the-cuff answers from other crypto project sales, we may provide longer answers with supporting details because that is what it means to be transparent.
- We’ve focused on providing access to a wide distribution of investors. One of the goals of our Reg A offering is to give access to retail investors who were unable to participate in previous sales. To help achieve that goal, any purchase request larger than $200K has to go through our investor relations team, so we can make sure there is enough room for our wider community to participate.
- No public tracker of sale progress, by design. The sale is open for 60 days by default. As described in the offering circular, we will give an update as a public notice, filed as a form 1U with the SEC as certain conditions are met. We will also give a public notice when the sale is closed. As a regulated sale, we have strict guidelines on the way we can share updates.
- We’re honoring 2017 voucher holders and new investors in this offering. We have two categories of offerings: the general offering and the voucher program. The voucher program is for developers and members of our core community who received a voucher because they were unable to participate in our 2017 offering to accredited investors. The Reg A+ framework allows us to offer tokens to non-accredited purchasers as well. Both tracks are open by default for 60 days as described above. Voucher holders who missed the May 28 registration deadline may still upload their voucher to join the waitlist. There are no new vouchers to give out.
The response to our offering has been overwhelmingly positive. We’re grateful to the community for the many questions and the opportunity to answer them. Please note that Telegram is not an official communication channel. The official communication channels are this blog, our mailing list, and the @blockstack Twitter account.
Below are a few additional questions that people have asked recently:
How much money has Blockstack raised?
Blockstack PBC has raised $5.1M in equity investments and $47.5M in the 2017 token offering. The last equity financing was the Series A round in Fall 2016.
Traditionally, venture-capital backed startups target around 12 to 18 months of runway after a new round of financing. As of July 2019, Blockstack PBC has 12+ months of runway at current burn rates. This runway projection (a) does not include funds contingent on achieving Milestone 2, (b) discounts the crypto holdings of Blockstack PBC, and (c) does not include any funds raised in the current Reg A and Reg S offerings.
Further, Blockstack PBC has a total of 110M STX in a long-term treasury. In addition, after completion of the 2019 offerings, approximately 231 million tokens from the genesis block will remain unallocated; the future use of these ~231 million tokens is under the discretion of Blockstack PBC.
Our audited financials are available in our offering circular at www.stackstoken.com/circular.
We expanded our team from 19 employees in January 2019 to 25 in July 2019 and we have several open positions.
What has been the recent traction on the network?
Blockstack PBC moved from the R&D phase to the infrastructure building phase in 2017 (upon closing of the Series A equity investment). Blockstack PBC successfully completed the launch of the Stacks blockchain in Q4 2018, meeting Milestone 1.
Since Q4 2018, we’ve been in the developer traction phase. The number of independent applications built on the network increased from 17 to 46 in Q4 2018, from 46 to 86 in Q1 2019, and from 86 to 165 by the time of our SEC offering qualification in July 2019.
The Blockstack network has 115,780 registered user accounts as of July 2019 and Blockstack PBC plans to start focusing on user acquisition as we move from the developer traction phase to user engagement phase.
How were tokens distributed to early investors?
Accredited Investors and funds in the 2017 Reg D token offering purchased tokens at a $0.12 price. Blockstack PBC raised $47.5M in this offering.
Holders of Blockstack’s Series A convertible preferred stock—who had invested a total of $5.1 million as of late 2016 and funded Blockstack’s early growth and development before the decision to create a token, or the drafting or publication of any white papers—were also provided an opportunity to purchase tokens at a nominal price per token before the 2017 Reg D offering. This opportunity to participate at a nominal price was given in return for their early support and in proportion to their equity ownership, and it was based on their reasonable expectation as early investors that they would receive tokens if Blockstack ever decided to create a digital token.
These tokens are subject to a three-year time lock, commencing upon the introduction of the genesis block to the Blockstack network in November 2018. The tokens for founders and employees are also subject to a three-year time lock starting November 2018.
Further, affiliates of Blockstack PBC including Union Square Ventures, Muneeb Ali, and Ryan Shea — three of the largest holders of Stacks tokens — have additional restrictions on selling tokens on the open markets.
The Securities and Exchange Commission (SEC) has qualified the offering statement that we have filed with the SEC. The information in that offering statement is more complete than the information we are providing now, and could differ in important ways. You must read the documents filed with the SEC before investing. The offering is being made only by means of its offering statement. This document shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
An indication of interest involves no obligation or commitment of any kind. Any person interested in investing in any offering of Stacks Tokens should review our disclosures and the publicly filed offering statement and the final offering circular that is part of that offering statement here*. Blockstack is not registered, licensed or supervised as a broker dealer or investment adviser by the SEC, the Financial Industry Regulatory Authority (FINRA) or any other financial regulatory authority or licensed to provide any financial advice or services.*
This communication contains forward-looking statements that are based on our beliefs and assumptions and on information currently available to us. In some cases, you can identify forward-looking statements by the following words: “will,” “expect,” “would,” “intend,” “believe,” or other comparable terminology. Forward-looking statements in this document include, but are not limited to, statements about our plans for developing the platform and future utility for the Stacks Token, our Reg A+ offering and launch of our network, and collaborations and partnerships. These statements involve risks, uncertainties, assumptions and other factors that may cause actual results or performance to be materially different. More information on the factors, risks and uncertainties that could cause or contribute to such differences is included in our filings with the SEC, including in the “Risk Factors” and “Management’s Discussion & Analysis” sections of our offering statement on Form 1-A. We cannot assure you that the forward-looking statements will prove to be accurate. These forward-looking statements speak only as of the date hereof. We disclaim any obligation to update these forward-looking statements.