ccFOUND Private Sale Summary ($1,35M story)
From the desk of Piotr Michalak, ccFOUND Founder & CEO
Dear Investors and everyone interested in the ccFOUND project! Thank you very much for participating in the private sale of CC tokens. At the beginning of last week (that is 9/11/2020) we returned from a week’s holiday after an exhausting campaign and with renewed strength we started to summarize and prepare for the next phase of the ccFOUND project development. Without prolonging it, let’s get to the point.
Let me remind you that ccFOUND issues a total of 99,999,997.00 CC tokens.
15% of this amount is intended for private sale, that is 14,999,999.55 CC.
It is worth reminding here that initially 10% of the tokens were planned to be allocated for private sale.
The campaign turned out to be so successful that we decided to make a vote in which people most interested in the project supported the idea to increase the allocation of tokens in private sale to 15%. The vote was posted on the mailing list, which you can still subscribe to at https://shop.ccfound.com/. Here are the results from 260 votes:
- 226 (87%) for “Raise the private sale limit to 15% from the pool belonging to ccFOUND company”
- 34 (13%) for “Keep 10% of tokens in private sale and return all overpayments”
This is also our community’s first vote, and we are aware it was imperfect. In the target DAO, we would like to authorize such votes with tokens, and also weigh them with the capital held. A person who has invested USD 50,000 should have a greater share in such a vote than the person who has invested USD 10,000.
At the same time, we agree with the majority of voters that the decision is favorable for the project, investors and the team. We start with a larger community, capital and decentralization, at the expense of a slightly smaller number of tokens that remain in the executive ccFOUND company. We have built greater social capital.
In further calculations, the following was assumed:
Nominal token price = USD 0.10
USD/PLN = PLN 3.80
BTC/PLN = PLN 60,000
As of 12/11/2020 the results of the private sale are as follows:
Paid CC tokens = 14,481,381.09 CC
We obtained USD 1,351,591.11 from investors
The entire private sale campaign began with a lecture about ccFOUND on 17/10/2020 on the online meeting of the customers of the Cryptography Institute.
Then we ran 4 more webinars and on the last one on 26/10/2020 at 8 p.m. it turned out that all the tokens were sold out. In practice we were in possession of collected orders and we waited for payments from investors. Most of the tokens were purchased by bank transfer.
Unfortunately, it finally turned out that after the removal of duplicate orders and after the resignation of individual investors, some tokens, in the sale increased to 15%, remained unpaid.
We anticipated that this could happen and there was a risk of accepting payments by bank transfer. It means that CC tokens with a nominal value of USD 51,861.85 were not covered, namely 518,618.46 CC tokens, that is approx. 0.5% of all tokens.
Therefore, 14.5% of tokens were sold in private sale.
We have decided not to extend the private sale stage any longer, not for financial but for time reasons. We know that many people have asked us to enter late. However, we believe that increasing the amount indicated above for the project will involve us for the next few weeks during which we will not be able to start implementing the project.
We do not want delays, as we currently have 4 systems to create:
1. An ecosystem of ccFOUND smart contracts
2. Auction platform for ccFOUND ICO
3. ccFOUND.com beta version
4. ccFOUND mobile app
As you will see later, the challenge is huge and requires our full commitment. Therefore, we decided that 0.5% of unsold CC tokens will ultimately remain with ccFOUND company, which will basically have 15.5% of all tokens (instead of the initially planned 20%).
I am asking potential investors to keep their capital for the ICO stage.
There will be an opportunity to invest in our project again, and by entering as early as possible, you will benefit against future investors. I want to remind you about the airdrop mechanism. We will certainly be affected by weaker weeks at our 50 weeks of daily auctions. In that situation half of the unsold tokens will be burned, and the other half will be airdropped to earlier investors in proportion to the tokens they previously purchased.
So wait patiently for the start of the ICO, probably at the end of the next quarter (Q1 2021).
Another important piece of information for investors is how much capital we ultimately have after tax. I would like to remind you that due to the legal status of CC tokens, we must pay both VAT (23%) and income tax on the above sale. The latter we will pay only 9%. In this way, we will save about PLN 308,000. Still, the tax burden we face is high compared to a simple equity fundraising.
We estimate the acquired capital after tax at a minimum of USD 999,957.65.
The real amount will probably exceed USD 1 million because in previous months we incurred expenses constituting the cost of obtaining income. In summary, we have at least PLN 3,799,839.07 after tax.
When planning the budget broken down into 12 months, we get the amount of USD 83,329.80 or PLN 316,653.26 per month. Breaking up this capital for 12 months is a pessimistic approach, after all in about 3 months we are planning to start the ICO.
However, we are not sure whether the ICO will be in high demand from the start. There is also no certainty whether delays arise for any reason beyond our control, formal and legal, or maybe even for the sake of the project in order to strengthen the interest on the international market even before the premiere.
Therefore, when planning the budget for 12 months I adopted a pessimistic approach, although we might as well consider 6 months while still maintaining the safety buffer. The above monthly amounts can therefore be doubled in your head.
Our goal is not to plan the spending of every penny, and real costs will fluctuate between months. However, we want to see what the security limit is, that is how much we can spend per month without fear of losing liquidity.
It is not difficult to spend all the money thoughtlessly. We are guided by the old principle of traders and investors: “First of all, don’t lose money”. In other words, we look at each coin from two sides before we spend it. On the other hand, in order to implement the project we need to hire qualified people with great potential, and not rely on interns.
At this point it is worth mentioning the bonuses and remuneration.
For the completed private sale I decided to pay myself a bonus of PLN 0. In practice — I bought another pair of dream headphones as a gift to myself, but with private funds. As a CEO, I still don’t get paid from ccFOUND and have no plans to change that. This way I would like to honor our investors.
However, we allocated a symbolic amount to bonuses for the team: two people received PLN 2,000 net, and three people will receive PLN 1,000 net each.
We should also note that the company will immediately pay the VAT due, and will incur costs in the coming months, some of which will also include VAT payable. Of course, it is deductible, while the company will not generate revenues for the next few months. For this reason, it is also worth calculating what net capital we have at our disposal, that is for what amounts we can accept invoices, on a monthly basis, excluding VAT.
As it is not difficult to calculate, the net monthly budget without VAT is USD 67,747.81 or PLN 257,441.67. In optimistic terms, spreading it over 6 months, we can see that we have PLN 0.5 million net per month at our disposal.
Let’s assume that employees employed B2B, including designers, programmers and testers, receive from PLN 5,000, through 10,000 to PLN 15,000 net per month.
We can very roughly assume PLN 10,000 net per month as an example value for the calculation. Therefore, we can see that we will employ about 25 people for the amount indicated above. More precisely, from 25 to 50 people, depending on whether we budget 6 or 12 months and whether real salaries approach the lower or higher range, not including the costs of office, equipment and external services.
Seeing the availability of candidates, we adopted a hybrid model. We will try to assemble the team mainly in Łódź, Poland, EU, but we must allow remote work at least partially.
In practice, at the time of writing this text, I distinguish the following positions in our organization (working names):
2. UI/UX Designer
3. System Analyst
4. Back End Developer
5. Front End Developer
6. Smart Contract Developer
7. Software Tester
8. Project Manager / Scrum Master
9. HR Specialist / Headhunter
10. Translator of English
11. KYC AML Controller
12. Subsidies and Grants Specialist
13. Financial Control Specialist
15. Community Manager
16. Public Relations Specialist
17. Media Buyer / Google & FB Ads
However, this does not mean 18 vacancies as we will have to employ more people for software-related positions.
Important: it is not necessary to fill all of these roles for the implementation of the project as the proposed structure will evolve (as of 12/11/2020).
The last important issue in the summary of ccFOUND private sale is the report on the share of cryptocurrencies in the collected funds. Through the bitbaypay payment processor, we obtained PLN 154,035.00, at the exchange rate as of 12/11/2020. It is a pure mix of bitcoin and ethereum.
In bitcoins, apart from bitbaypay, we have PLN 414,000.00. Total amount of PLN 568,035.00 was raised in crypto. We assume that the capital in crypto should amount to 30% of the collected sum, that is at least PLN 1,139,951.72 after taking into account taxes.
We have already bought cryptocurrencies for PLN 70,000.00. Cryptocurrencies for PLN 501,916.72 remain to be purchased. We will mostly invest in bitcoin and ethereum, unless our analyses show that we should do otherwise.
I think that our investors and readers may be surprised by the fact that cryptocurrencies have a small share in the funds collected by us, when we take into account the fact that the private sale was directed largely to the community of the Cryptography Institute.
The observation comes to mind — even cryptocurrency investors prefer payment by bank transfer.
Most ICOs, however, only raise funds using ethereum. It turns out that our openness to traditional payment methods turned out to be a great competitive advantage and we want it to remain so.
In the upcoming ICO, we are already planning the architecture of the auction system so that it allows for payment of amounts by transfer, and then bidding using the deposited funds.
The purchase of cryptocurrencies cannot be the only method of securing the company’s financial security. We see increasing risk in the banking system.
Recently, a bank servicing several of our other companies refused to open accounts for 4 new entities from our group without giving any reason (!).
There was no ccFOUND in that group; both project companies already have accounts with this bank.
Therefore, we are preparing to open a backup account at a prestigious bank abroad, which will be incredibly expensive, but will provide access to additional ICO process support services. We will reveal more when the project is successfully implemented.
Currently, our priority is to set up the HR system for the company, starting from the recruitment system with an emphasis on trial verification tasks, through the remuneration system based on measures and goals for individual positions.
It is particularly important from the perspective of programming the organization to implement and achieve the goals set for it. It is not about hiring people who only make a good impression and then burn the investors’ money. It is about working in the COVID era, when so many parents are facing stress and homeschooling. The challenge ahead is huge, so I apologize to those who have already applied to us for work and are waiting for an answer; please be patient.
I also invite other candidates to apply to email@example.com. Take the initiative and suggest how you can best help us implement the ccFOUND project.
Meanwhile, we go back to work, creating a new organization for you from scratch, a completely decentralized business that will change a piece of the world for the better, bringing you profits at the same time, despite difficult times, or maybe because we have difficult times.
Keep your fingers crossed for us.
— Piotr Michalak