Can this ICO democratise venture capital?

Crypto-crowdfunding-VC fusion platform Equi is the brainchild of Doug Barrowman and Michelle Mone.

by Adam Gale
Last Updated: 07 Mar 2018

We don’t normally cover ICOs at Management Today. The sound of hot air inflating asset bubbles tends to put us off. But we couldn’t stay away from Equi, which we can only describe as a cross between a crowdfunding platform and a venture capital fund, paid for by a cryptocurrency called Equi Tokens.  

‘We thought let’s take the best parts of crowdfunding, the best parts of venture capital and put them together,’ says veteran private equity and VC investor Doug Barrowman, who’s launching Equi as part of his Knox Group of Companies.

The idea is actually quite simple. Equi will invest in a small number of high growth firms in the tech, biotech and cryptocurrency sectors – Barrowman says he’d be surprised if there weren’t 10-15 in the first year – much as a traditional venture capital firm would. But those investments will be available, at least initially, to anyone with $100 (£80).

That’s the launch price for an Equi Token, the Etherium-based cryptocurrency that will be required to invest on the platform at equi.capital. The pre-launch was on Friday, while the ICO is set for March 15.

‘Venture capital is traditionally the preserve of institutions and ultra high net worth individuals, so what we’re trying to do is open it up to a wider audience,’ says Barrowman, whose companies have £3bn in assets under management and administration. ‘But we can hopefully attract bigger projects than you could traditionally get in crowdfunding.’

Barrowman is something of a convert to blockchain technology, which he believes will allow the firms on the platform to raise capital far quicker than by conventional means.

He’s joined in the venture by his business and life partner, the serial entrepreneur, life peer and former Management Today 35 Under 35 star Michelle Mone.

‘I just loved Doug’s idea about finding tomorrow’s superstars,’ says Mone, who sits on the Equi advisory board with other entrepreneurs.

‘When I sold Ultimo I thought I’d retire, but I loved the fact we’re helping these businesses. We’ve already identified five we want to get going with. These entrepreneurs are quite something. You never know, tomorrow we might find the next Facebook, Snapchat or Twitter.’  

Barrowman and Mone aren’t exactly the types to get carried away in the crypto-mania that’s afflicted the world over the last year. ‘Out of the 1,500 ICOs that have taken place to date, there’s a smoking chance that 1,400 at least will fail,’ Barrowman says.

But they hope they will be free of the sector’s volatility, because the value of Equi Tokens is effectively married to the value of the investments on the platform.

Barrowman and Mone’s financial interest is fairly typical for an ICO – they start with a tidy share of the cryptocoin supply, while the broader Equi team takes a direct cut of the returns when an investment matures (the Token holders' share will be 70%).

They described interest in the pre-launch as ‘phenomenal’, and hope to raise up to $80m in the ICO.

Main Image credit: Steve Heap/Shutterstock

Images of Doug Barroman and Michelle Mone: Dan Kennedy

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