(Note that this article makes many assumptions because the SAFT and other information related to the Filecoin ICO has not been released and as such I am limited to speculation)
On August 7th, Filecoin will have its ICO. Filecoin is the product of Protocol Labs, a venture funded company. What makes Filecoins ICO so interesting is it will be the very first ICO (that this author is aware of) to only sell to accredited investors. This presents one of the largest profit (or loss- explained later) opportunities to hit crypto.
Why, you ask? Well- its simple when you think about it. By virtue of this ICO only being purchasable from accredited investors you immediately create demand from the general public who cant particpate.
But its more than that-
Since this is being done from Coinlist (AngelList partner site), you should expect a very large portion of traditional Angel/VC investors to participate. These guys are used to holding for long periods of time. This means there will be little supply on the exchanges and prices will be driven up when it is initially listed.
Since the only people who can invest are accredited, you instantly will get a massive investor base of powerful evangelists. Instead of having joe-nobody talking in the poloniex trollbox about filecoin, you will have the General Partner from XXX Venture Partners writing medium posts. The quality of evangelists you can receive by making this ICO ‘accredited only’ is absolutely amazing.
And since you will pick up a ton of powerful people and companies investing in, the general public will view this as a success. If the head of marketing for amazon decides to buy filecoin in this ICO and tweet about it, thats a major price movement factor. Crypto is entirely built on hype. I watched monero move up 40% in price just because fluffyponza tweeted that a announcement was coming- And he ended up trolling all crypto traders in the process.
Additionally, Filecoin has a great team and will undoubtedly get great partners. Its in a similar business as storj, sia, etc.. which have all done well. But Filecoin will undoubtedly surpass both of them simply from the industry connections they have by being VC funded. Startups make or break less on the technology they have and much more so on the press and partnerships they can make. There is no way sia or storj can even hope to keep up.
Now with that said- Here is why filecoin might not be for you.
1: It looks like there is going to be forced vesting. If you listen to this podcast at around 19:30 it states “you will get coins when the network launches.” Based on the size and scope of the Filecoin project, thats going to be at least a year (in this authors opinion). There was also a forbes article which hinted at a 2 year period. This is a incredibly long lockup rarely (if ever) seen before in crypto. Do you know where Ethereum or Bitcoin will be in 2 years? Hell no. Now try to predict the value of Filecoin.
2: Let us remember that Filecoin is VC funded. Normally that doesn’t matter, but Filecoin is only allowing accredited investors who legally could have partaken in the Seed or A-Round. You as the token purchaser will get less benefits than a normal investor (no profit from a company sale, no board seat, etc..), take on more risk (forced to vest your purchased tokens, no guaranteed rights to invest in a future round), and generally exist to be a ‘free’ B-Round. No wonder all the VC’s are so excited about the SAFT, it significantly derisks their investment on your dollars.
3: The ‘Initial Market Cap’ for Filecoin is unknown. If its anywhere close to what sia or storj is today, Its going to be a tough pill to swallow. Anyone coming into this ICO should expect that the market cap when it hits the exchange will be similar to SIA. If you have that market cap already baked into the ICO price, you are going to be in for a rough time. Do the math and ask yourself where on Coinmarketcap you really think Filecoin will be when its listed. If the initial price is already valuing it at hundreds of millions of dollars,you have to question some of the mantra of “you get tokens when it launches because they are worthless now”
So, with all that said, is Filecoin a good investment opportunity? I think the answer is still yes. However, much of that ‘yes’ depends on the above factors of vesting and initial offering price, but the team seems very smart and hopefully they will make the necessary changes/adjustments. in fact, I am quite positive if Filecoin does change the above issues, they could have one of the largest ICOs ever. I remain a huge fan of the team and technology either way and I look forward to their progress.