Phone menu Close
Does Telegram’s ICO Mark the End of the IPO Era?
Sign up as an investor
All information indicated in this form will only be used by Thelephant.io
for the sole purpose of the examination of the company or the stock required
and will not be published without the approval of the registrant
Sorry, there was a problem. You’ll find more detailes highlighted below.
1
Personal
Details
2
Investor
Declaration
3
Terms And
Policies
Accredited Investor Declaration
Sorry, there was a problem. You’ll find more detailes highlighted below.
If your country of residency does not appear in the list, please select 'Rest of the World'

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents the PEC tokens, as described in The Elephant's White Paper have not been registered under any securities laws in any jurisdiction (together with the Act, the “Securities Laws”), but rather are being and will be allocated by The Elephant pursuant to exemptions from registration under the Securities Laws.

Accordingly, the undersigned gives the following representations and warranties:

• It has the knowledge and experience in financial and business matters required to receive and use the PECs and/or services to be made available by THE ELEPHANT, as described in the White Paper, as amended from time to time, and as such it is capable of evaluating the merits and risks involved with them.

• The purpose of this declaration is to enable THE ELEPHANT and its affiliates to discharge its responsibilities under such exemptions and that THE ELEPHANT will rely upon the information contained herein, and therefore, the representations herein are complete, accurate and binding, and may be relied upon by THE ELEPHANT and its affiliates.

• Although THE ELEPHANT will use their best efforts to keep this letter strictly confidential, they may present this declaration and any other information which the undersigned has provided to them to such parties as they deem advisable if called upon to establish the availability under the Securities Laws of an exemption from registration of the offer and sale of the PEC or any other service to be made available by THE ELEPHANT, as described in the White Paper, as amended from time to time, or if the contents thereof are relevant to any issue in any action, suit or proceeding to which THE ELEPHANT or its affiliates is a party or by which they or it are or may be bound.

• Any offer or services that may be made available to the undersigned by THE ELEPHANT or its affiliates (i) will not constitute a violation of any laws or regulations, including the Securities Laws and investment advice laws, of any applicable jurisdiction; (ii) will be permissible under all applicable Securities Laws and shall not trigger any licensing, registration, or other requirements.

• It shall not transmit or otherwise send any information to which THE ELEPHANT will give it access to, to any person in any jurisdiction in which the distribution of such information and/or the offering or services to be offered by PEC are not authorized, or to whom such offer or invitation may be unlawful.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is a “sophisticated investor” or a “professional investor” and a “wholesale client” (and not a “retail client”) as defined under the Corporations Act (Cth) 2001

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that:

1. Any fiat currency used by the undersigned in connection with the offering and services to be made available by The Elephant, as described in its White Paper and associated commercial terms, as changed from time to time, is legally owned by the undersigned and not raised from any other parties.

2. In respect of the transaction made in connection with these offering and services, it has not obtained any access to the relevant transaction information in a press release, conference, advertisement, announcement, professional or trade publication or marketing materials within the People’s Republic of China.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it has made appropriate enquiries and has full knowledge of the nature, rights and obligations arising out of the offering or the services made available by The Elephant, as described in its White Paper and associated commercial terms, as changed from time to time, and obligations applicable to it under the laws of the Arab Republic of Egypt, and will not make any offerings, disposals, investments or otherwise transact with regard to offering or the services made available by The Elephant in case such offering, disposal, investment or other transaction is in contravention to the laws, regulations, governmental circulars and decrees of the Arab Republic of Egypt.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is located or resident in the European Economic Area (the “EEA”), it is a “qualified investor” within the meaning of the law in any member state of the EEA which has implemented the Directive 2003/71/EC, and amendments thereto, including Directive 2010/73/EC (the “Prospectus Directive”), implementing Article 2(1)(e)(i), (ii) or (iii) of the Prospectus Directive.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is a “qualified investor” within the meaning of Directive 2003/71/EC, as amended, and it professionally or commercially purchases or sells securities or investment products (Vermögensanlagen) within the meaning of the German Investment Product Act (Vermögensanlagengesetz) for its own account or for the account of others.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is a “qualified investor” as such term is defined in the Prospectuses Act 2005 of Gibraltar (as amended) and in Directive 2003/71/EC. It is a “professional client” as such term is defined in the Financial Services (Markets in Financial Instruments) Act 2006 of Gibraltar; and that it has not requested “non-professional treatment” within the meaning of Schedule 2 of the Financial Services (Markets in Financial Instruments) Act 2006 of Gibraltar.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is a professional investor (as such term is defined in Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong)).

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE WILL BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is:

1. An Investor to which at least one of the categories set forth in the First Addendum to the Israeli Securities Law, 1968 (the "Securities Law") and as listed below apply (a "Sophisticated Investor"); and

2. aware of the implications of being a Sophisticated Investor, and agree thereto.

The categories are:

1. A Joint Investment Trust Fund, as such term is defined in the Joint Investments Trust Law, 1994, or a management company of such a fund;

2. A Provident Fund or a Management Company as such terms are defined in the Control of Financial Services Law (Provident Funds), 2005;

3. An Insurer, as defined in the Insurance Supervision Law, 1981;

4. A Banking Corporation or an Auxiliary Corporation, as such terms are defined in the Banking (Licensing) Law, 1981, other than a joint services company, acquiring for their own account or for the account of clients which are investors who fall within the categories listed in Section 15A(b) of the Securities Law;

5. A Portfolio Manager, as such term is defined in Section 8(b) of the Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 1995 (the "Investment Advice Law"), acquiring for its own account or for the account of clients which are investors who fall within the categories listed in Section 15A(b) of the Securities Law;

6. An Investment Adviser or an Investment Marketer, as such terms are defined in Section 7(c) of the Investment Advice Law, acquiring for its own account;

7. A member of the Tel Aviv Stock Exchange acquiring for its own account or for the accounts of clients which are investors who fall within the categories listed in Section 15A(b) of the Securities Law;

8. An Underwriter, as such term is defined in section 1 of the Securities Law, that meets the qualifying conditions according to Section 56(c) of the Securities Law, acquiring for its own account;

9. A Venture Capital Fund; for this purpose, a “Venture Capital Fund” means a body corporate the main activity of which is investment in bodies corporate whose main activity, at the time of the investment, is research and development or the production of innovative and knowhow intensive products or processes, investment in which involves greater risk than what is customary in other investments;

10. A body corporate wholly owned by investors that fall within the categories listed in section 15A(b) of the Securities Law;

11. A body corporate, other than a body corporate incorporated for the acquisition of securities from a certain offer, with an equity capital in excess of NIS 50 million;

12. An individual, investing for his or her own account:

a. The total value of his or her Liquid Assets exceeds NIS 8 million;

b. His or her annual income in each of the previous two years exceeds NIS 1.2 million, or 1.8 million for a Family Unit; or

c. The total value of his/her Liquid Assets exceeds NIS 5 million and his/her annual income in each of the previous two years exceeds NIS 600,000 for an individual, or NIS 900,000 for a Family Unit.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is a “wholesale investor” as that term is defined in clauses 3(2)(a), (c) or (d) of Schedule 1 to the Financial Markets Conduct Act 2013 of New Zealand (“FMC Act”), being a person who is

☐ an “investment business”;

☐ “large”; or

☐ a “government agency”,

in each case as defined in Schedule 1 to the FMC Act.

2. The undersigned understands the consequences of certifying itself to be a wholesale investor.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is an “institutional investor” as defined under the Decree-Law 1 of 1999 and Accord 1 of 2001, both as amended, in relation to whom the registration of the securities to be offered and sold is not required. Pursuant to the foregoing, the undersigned (i) is a legal entity, validly formed and in existence, (ii) has participated, on a regular basis, in at least the previous two years, in the administration of investments substantially similar to those described in The Elephant White Paper, (iii) has a net worth of at least one million dollars, (iv) has key executives or, a majority of its directors and officers, that have at least two years of experience in the regular administration of investments and (v) does not require the protection of the provisions set forth in the securities laws of the Republic of Panama.

The undersigned acknowledges that the securities have not been registered under the Panamanian securities laws and regulations and may not be offered or sold within Panama except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the Panamanian securities laws and regulations.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is a “qualified investor” within the meaning of the Federal Law of the Russian Federation “On Securities Market” No. 39-FZ dated April 22, 1996, as amended, (ii) the execution and performance of the offering and services to be made available by The Elephant, as described in its White Paper and associated commercial terms, as changed from time to time, do not violate applicable laws of the Russian Federation and (iii) in making any payments in connection with offering and services, it has complied or will comply with the requirements of all applicable laws of the Russian Federation, including with respect to foreign currency transactions. The undersigned acknowledges that the The Elephant is relying in part upon the truth and accuracy of, and the undersigned's compliance with, the representations, warranties, agreements, acknowledgements and understandings of the undersigned set forth herein in order to determine its eligibility to gain access to as PrivatEquity's offering and services, as described in its White Paper and associated commercial terms, as changed from time to time and the undersigned is aware of the legal consequences of the foregoing.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE WILL BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is either an “institutional investor” as defined under Section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“SFA”) or a “relevant person” as defined under Section 275(2) of the SFA (including an “accredited investor” as defined under Section 4A(1) of the SFA).

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is an “investment professional” within the meaning of Article 11(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act of South Korea.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is a “qualified investor” within the meaning of the Swiss Collective Investment Schemes Act of June 23, 2006, as amended, its implementing ordinance and regulatory guidance.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is located or resident in the United Kingdom, it is a person of a kind described in Articles 19 and/or 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), or that the offering or the services made available by The Elephant, as described in its White Paper and associated commercial terms, as changed from time to time, may otherwise be lawfully distributed to it pursuant another applicable exemption under the Order.

The undersigned acknowledges that these offering and services are only directed at (i) persons who have professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Order, (ii) high net worth entities (including companies and unincorporated associations of high net worth and trusts of high value) or other persons falling within Article 49(2)(a) to (d) of the Order, and (iii) persons to whom such offering and services may otherwise be lawfully distributed.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents that it is an “accredited investor” (an “Accredited Investor”) as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended, for one or more of the reasons specified below:

 Where the undersigned is a natural person:

 He or she has an individual net worth, or joint net worth with my spouse (determined by (i) subtracting total liabilities from total assets, and (ii) excluding the value of my primary residence), in excess of $1,000,000; and/or

 He or she had an individual income in excess of $200,000 (or a joint income together with my spouse in excess of $300,000) in each of the two most recently completed calendar years, and reasonably expects to have an individual income in excess of $200,000 (or a joint income together with my spouse in excess of $300,000) in the current calendar year.

 Where the undersigned is or acting on behalf of:

 a corporation, partnership, limited liability company or similar business trust or organization described in Section 501(c)(3) of the Internal Revenue Code not formed for the specific purpose of acquiring the Tokens that has total assets in excess of $5,000,000;

 a bank as defined in Section 3(a)(2) of the Securities Act, a savings and loan association, or other institution defined in Section 3(a)(5)(A) of the Securities Act acting in either its individual or fiduciary capacity (this includes a trust for which a bank acts as trustee and exercises investment discretion with respect to the trust’s decision to invest in the Token);

 a broker dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended;

 an insurance company as defined in Section 2(13) of the Securities Act;

 an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or a business development company as defined in Section 2(a)(48) of the Investment Company Act;

 a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, as amended;

 a plan established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions, for the benefit of employees, having total assets in excess of $5,000,000;

 an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (a) for which the investment decision to acquire the Tokens is being made by a plan fiduciary, as defined in Section 3(21) of ERISA, that is either a bank, savings and loan association, insurance company, or registered investment adviser, (b) which has total assets in excess of $5,000,000, or (c) which is self-directed, with the investment decisions made solely by persons who are Accredited Investors;

 a private business development company defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended;

 a trust not formed for the specific purpose of acquiring the Tokens with total assets in excess of $5,000,000 and directed by a person who has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of investing in the Tokens;

 a revocable trust (including a revocable trust formed for the specific purpose of acquiring the Tokens) and the grantor or settlor of such trust is an Accredited Investor; and/or

 an entity in which each equity owner is an Accredited Investor.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents the PEC tokens, as described in The Elephant's White Paper have not been registered under any securities laws in any jurisdiction (together with the Act, the “Securities Laws”), but rather are being and will be allocated by The Elephant pursuant to exemptions from registration under the Securities Laws.

Accordingly, the undersigned gives the following representations and warranties:

• It has the knowledge and experience in financial and business matters required to receive and use the PECs and/or services to be made available by THE ELEPHANT, as described in the White Paper, as amended from time to time, and as such it is capable of evaluating the merits and risks involved with them.

• The purpose of this declaration is to enable THE ELEPHANT and its affiliates to discharge its responsibilities under such exemptions and that THE ELEPHANT will rely upon the information contained herein, and therefore, the representations herein are complete, accurate and binding, and may be relied upon by THE ELEPHANT and its affiliates.

• Although THE ELEPHANT will use their best efforts to keep this letter strictly confidential, they may present this declaration and any other information which the undersigned has provided to them to such parties as they deem advisable if called upon to establish the availability under the Securities Laws of an exemption from registration of the offer and sale of the PEC or any other service to be made available by THE ELEPHANT, as described in the White Paper, as amended from time to time, or if the contents thereof are relevant to any issue in any action, suit or proceeding to which THE ELEPHANT or its affiliates is a party or by which they or it are or may be bound.

• Any offer or services that may be made available to the undersigned by THE ELEPHANT or its affiliates (i) will not constitute a violation of any laws or regulations, including the Securities Laws and investment advice laws, of any applicable jurisdiction; (ii) will be permissible under all applicable Securities Laws and shall not trigger any licensing, registration, or other requirements.

• It shall not transmit or otherwise send any information to which THE ELEPHANT will give it access to, to any person in any jurisdiction in which the distribution of such information and/or the offering or services to be offered by PEC are not authorized, or to whom such offer or invitation may be unlawful.

PLEASE NOTE EXTERNAL CONFIRMATION AND/OR EVIDENCE MAY BE REQUIRED BEFORE THE ACCREDITAION PROCESS IS COMPLETED

1
Personal
Details
2
Investor
Declaration
3
Terms And
Policies
Terms And Policies

By filling in this form and selecting the 'I confirm' button below, the undersigned hereby confirms and represents the information above does not qualify as a recommendation or an opinion with regard to conducting any transaction or investment. Each investor should conduct his or her own checks and verifications, while taking into account his or her specific circumstances and requirements. All the relevant aspects of the purchase, including the legal, economic and tax aspects, should be carefully examined with the assistance of professionals and consultants on the investor’s behalf.

The information above or on the site and the blog does not qualify as an offer of investment and is meant for general information only. Offers for selling of the securities will be delivered only to ‘Accredited Investors‘ as defined in the first supplement of the Israeli Securities Law, 5728-1968. The Elephant, shall not be responsible or liable and shall not guarantee in any way the return of the investments to investors, including any profits earned as a result of such investments. The engagement with the investors shall be in accordance with the transaction documents and the conditions stipulated therein, subject to the negotiations that will be held with the investors.

The Elephant charges fees from sellers and buyers of securities, and therefore The Elephant has an interest in the information posted about various companies.

The information published on the Site, does not constitutes an investment consulting as defined in the Regulation of Investment Consulting, Investment Marketing and Portfolio Management, 1995, and the said information is not a substitute for professional consulting which among others takes into consideration the special needs of every person.

For those who are considering making an investment (including sale and purchase of securities) via the website, can apply different laws deriving from their residence or citizenship, including tax laws, laws relating to the statement or report on investment activity, laws relating to the eligibility of investing, regulatory issues in process and so on. Therefore, those who are considering making such an investment, undertake to examine the applicability of any applicable laws, as they are committed to take all necessary action in order not to violate the said laws, including to disclose fully and fairly in relation to any investment to any local lawfully authority, as the law requires such disclosure.

We welcome you to The Elephant Investors Community, your gateway to the Secondary Market.

Note:
The provision of information in this website is not based on your individual circumstances and should not be relied upon as an assessment of suitability for you of a particular product, service, or transaction. It does not constitute investment advice, tax advice or legal advice and The Elephant Platform makes no recommendation as to the suitability of any of the products, services or transactions mentioned herein. The information included in this website is intended to “Accredited Investors” only, as this term is defined in the jurisdiction in which they reside (or such similar term in such jurisdictions financial regulations). Non-Accredited investors may not partake in any products, services or transactions mentioned herein or offered by The Elephant.


* Please note that the purchase of the shares of any Target Company may be subjected to right of first refusal of other shareholders, in some cases also to approval of the Target Company’s board of directors or other transfer restrictions as may be applicable.

Does Telegram’s ICO Mark the End of the IPO Era?
Sign up as a private stock seller
All information indicated in this form will only be used by Thelephant.io
for the sole purpose of the examination of the company or the stock required
and will not be published without the approval of the registrant
Sorry, there was a problem. You’ll find more detailes highlighted below.
1
Personal
Details
2
Company
Details
3
Terms And
Policies
Company Details
Sorry, there was a problem. You’ll find more detailes highlighted below.
1
Personal
Details
2
Company
Details
3
Terms And
Policies
Terms And Policies


We congratulate you for choosing to check the opportunity of offering
the securities you own and hold for sale via The Elephant’s site

Your message was sent successfully

Note:
For those who are considering making an investment (including sale and purchase of securities) via the website, can apply different laws deriving from their residence or citizenship, including tax laws, laws relating to the statement or report on investment activity, laws relating to the eligibility of investing, and so on. Therefore, those who are considering making such an investment, undertake to examine the applicability of any applicable laws, as they are committed to take all necessary action in order not to violate the saids laws, including to disclose fully and fairly in relation to any investment to any local lawfully authority, as the law requires such disclosure.

Does Telegram’s ICO Mark the End of the IPO Era?

Telegram is an instant messaging service whose main selling point is strong encryption, allowing users to chat privately. Secret chats are stored on the device, rather than the cloud and can be set to destruct after a certain time. Telegram’s applications are available for Android, iOS, and PC, and let users send messages and exchange photos, videos, stickers, audio, and files of any type. Russian brothers Nikolai and Pavel Durov, who had previously launched VK, Russia’s most popular social network, launched Telegram in 2013. Since then, Telegram has been somewhat nomadic in an attempt to avoid government influence, with reports saying they were headquartered in Berlin for some time and are currently based in Dubai.

Telegram reached 200 million monthly active users in March 2018 and delivers over 70 billion messages every day. At least 500,000 new users join Telegram daily.

Telegram is raising funds through a multi-round ICO (initial coin offering). The company was previously reported to be raising a total of $1.2 billion through their ICO, but later reports have put the potential total at $2.55 billion. This would be by far the biggest ICO yet. The first round in February 2018 raised $850 million from venture capital funds.

Top_10_highest_icos_and_telegram

There has been a trend amongst ICOs to offer large discounts in the pre-sale phase to encourage large investors to contribute. According to industry insiders, the minimum limit for Telegram’s ICO has been as high as $20 million for outsiders and $500,000 for “friends”. So far, the Telegram ICO has been offered privately and, in the US, only to professional investors. Telegram is considering advancing ultimately to a public ICO — in which anyone could buy Grams, according to company documents. The company is promising to return money to investors if it fails to create the planned blockchain with a built-in cryptocurrency by late 2019. Although most ICOs raise funding through transfers of bitcoin or ether cryptocurrencies, Telegram is raising funds in traditional, fiat currency, and mostly from classic, not crypto-focused venture investors.

According to a story in Recode, big-name venture firms including Sequoia Capital, Benchmark and Kleiner Perkins Caufield & Byers are participating in the deal. However, Andreessen Horowitz and Union Square Ventures, which made early bets in the crypto space, have taken a pass.

Telegram’s funding differs from conventional ICOs thus far in that only accredited investors who are invited may purchase the discounted coins. This more closely resembles the traditional venture capital form of fundraising where most (if not all) of the discounted tokens are sold off to private investors before the public round opens. However, unlike typical venture deals, investors don’t get a board seat, voting control or shareholder protections, and they hold no equity.

Telegram’s Offering

Telegram is best known for a messaging app, which the company claims is used in over 60% of ICO projects. However, the company’s own ICO has ambitions far beyond instant messaging. The company is planning to develop the building blocks for a decentralized internet that could eventually power decentralized apps (known as DApps), smart contacts, censorship-proof websites and more.

The Telegram Open Network (TON) is intended to host and provide a variety of services, including:

  • Distributed file storage similar to services like Dropcoin and ICO company Filecoin
  • A proxy service for creating decentralized VPN services and TOR-like secure browsing environments based on the blockchain
  • Services for decentralized apps, smart contracts and decentralized web browsing experiences
  • Payments for micropayments and peer-to-peer transactions

If Telegram is successful in developing these various components and integrating them into one usable system, the company could leap from a messaging app to a broader content platform. Telegram’s existing ecosystem will offer simple ways of buying and spending Grams via its Bot Platform and a TON-based ad exchange, allowing for trade in cryptocurrencies, paid promotional advertising, paid content and subscription services, virtual storefronts, and more. Telegram will also offer a searchable registry of available decentralized services, with lists and recommendations, similar to Google Play / App Store.

Rather than using a platform like ethereum for its token sales and services like most ICOs, Telegram wants to create a platform of its own to rival Ethereum for hosting a new wave of decentralized services and internet experiences tipped to emerge thanks to the blockchain.

 

ICO vs IPO

Choosing an ICO over an IPO has significant benefits, but it brings extensive risk and media attention. If Telegram had run into issues with their ICO, it could have been disastrous for both the company and the crypto community. Therefore, Telegram played it safe. The TON sale is certainly an ICO, but the company has made sure to comply with SEC regulations and has included other measures such as accepting fiat currency payment.

Choosing an ICO has various clear benefits for a startup. Companies have been able to raise exorbitant amounts of money, often very quickly and easily. In addition, many ICOs let company founders keep all of the equity in their company. Telegram CEO Pavel Durov has said he won’t give up control of Telegram to other investors, and the ICO structure lets him raise funds while keeping control.

IPOs give investors stock ownership in a company. Unlike IPOs, ICOs basically provide tokens that their sellers promise will be useful in a new digital network, once it gets built. However, the value of a company itself and the value of the goods or services it provides are generally tied to each other, meaning in each case the value to the investor is tied to the success of the business.

Another advantage of ICOs over IPOs is that prices can be adjusted over the course of the ICO in accordance with changing demand. Telegram reportedly discounted its tokens in the first round of their ICO, and then increased the price for the second round. This is an advantage over IPOs in which a company must make an educated guess and use available information to predict demand, which is why stocks like LinkedIn several years ago saw a near 100% increase in its price during an IPO. It underestimated, and could not adjust.

One issue for people in the startup world is non-liquid equity. Founders or employees of companies hold shares of companies that they cannot sell or benefit from for years, until the company reaches an exit. ICOs have dramatically improved liquidity for companies, letting token holders buy and sell tokens without waiting years for an exit. This solves one of the biggest problems for startup employees. It is also a key reason why ICOs can be seen trading at such inflated market caps.

Finally, ICOs these days offer large amounts of publicity and media attention, which can also benefit a company, especially a B2C company such as Telegram that is reliant on signing up large numbers of individual users.

However, some are skeptical about Telegram’s ICO. “It’s difficult for me to find a convincing argument to why Telegram is going after all this money, and will investors ever see any return from it,” says Alex Buelau, CEO and co-founder of Coinschedule.com, a website that lists upcoming ICOs. “Ethereum raised $20 million and was able to launch and grow into a network of millions of users with a healthy market cap of $80 billion, so why does Telegram need 250 times more money,” he asks.

For the ICO system of funding to take hold, there is a lot of work that still needs to take place. Teams and investors need to have lock-up periods that are legally binding to avoid pump & dump scams and insiders taking advantage of the public. Token sales are a young phenomenon, but are already revolutionizing how startups raise money.

 

Will Other Companies Follow Suit?

The more successful Telegram’s record-breaking ICO is, the more likely other companies will choose the ICO route for raising funds as well. This ICO may serve as a turning point for the sector. As Pavel Durov initially became wealthy by imitating Facebook with his social media company VKontakte, other messenger apps may copy Durov and follow the crypto route, at least as a means for raising money. Most messaging apps are cash negative. If successful, Telegram could possibly set the stage for similar moves by China’s WeChat and possibly Facebook’s Whatsapp. Many companies in the realm of crypto are interested in following up Telegram’s ICO with similar rounds of their own, but this ICO has made non-crypto companies take note as well.

Others think ICOs may become a competitor to investment banks who help companies with initial public offerings. “Telegram’s ICO is a sign for other well-known companies to issue tokens to raise money instead of doing an IPO,” says Storiqa’s CEO Ruslan Tugushev. “Pavel is showing that even firmly established companies can expand and go global with an ICO.”

Kickstarter proved the idea that people were willing to pre-purchase a product, and now ICOs and TGEs (token generation events) are taking that same idea and applying it to software and services. The more companies raise funds through ICOs, the more the IPO market and stock exchanges will be adversely affected.

 

Effect of ICOs on Markets

ICOs make funding more accessible. Previously, entrepreneurs have been limited to angel and VC investors. These funding sources are less accessible to some entrepreneurs due to geography, social status, language barriers, and other obstacles. In addition, VCs often take large chunks of equity and can decrease the control entrepreneurs have over their own companies, both in terms of shares and in terms of business direction. Raising money through ICOs erases some of these problems, making it easier for different types of people and companies to raise money and then develop their company as they see fit. This has its advantages in accessibility for entrepreneurs, but also means that with less responsibility to others, they are more free to lag in development or even give up altogether.

Unfortunately, due to poorly written crowdfunding rules (smart contracts) and negligent investors, it is common for funds to be mismanaged post-ICO. Despite the functionality that Ethereum smart contracts offer, almost all the ICOs are structured to allow the founders total control over all the funds post-ICO. Meaning there is a very little financial incentive for the development team to build the actual product. Increased regulation may help negate this. As governments and federal agencies such as the SEC become more familiar with ICOs, regulations are catching up to this fast-developing space.

On the investor side, ICOs are changing markets by allowing a wider pool of investors to participate in funding early stage companies. This may alter the space of investing, with more opportunities for smaller investors and less impact for established, wealthy VC funds. On the other hand, established investors have been displaying a sense of urgency to get in on the impressive returns from ICOs. This may be connected to Telegram’s decision to set minimums of millions of dollars for investors in the first round of their ICO.

Telegram’s ICO may also include signs of a future convergence between ICOs and IPOs. Telegram’s ICO includes minimum investments that prohibit most individual investors from participating, and also accepts investments in fiat currency rather than bitcoin or ethereum. If other large companies follow Telegram in pursuing funding through ICOs but geared towards conventional large investors, and the SEC settles on standard regulations that these ICOs comply with, it may be the beginning of a new era of startup funding.

Sign Up To Our Newsletter
Leave your details now to receive additional information regarding The Elephant and the Secondary Market activities
Telegram Linkedin Twitter Facebook