ICO Alert does not endorse or recommend participating in any initial coin offerings. ICO Alert receives a promotional fee for the production of this ICO Alert Report. Please click here for additional important information.
What is Value Coin?
Value Coin Fund is an investment fund that aims to reduce the risk and volatility of owning a cryptocurrency by investing in the stock market. Our main and sole goal is to generate double-digit annual returns on your Value Coin tokens for years to come.
The Value Coin crowdsale began on September 15, 2017 and will end on October 31, 2017. The price per token is proportional to the amount of capital raised. The initial Value Coin token price will be determined after the ICO by dividing the total capital raised by the amount of tokens issued (100 million). The minimum amount of investment required is 0.2 Bitcoin, 1 Litecoin, 0.2 Ether, or 50,000 Dogecoin.
If the minimum goal of $750,000 is not raised, a refund process will go into effect for everything that was contributed. There is a hard cap of $50,000,000 that, if reached, will end the crowdsale immediately.
Value Coin tokens are ERC-223 tokens and can be purchased through the Value Coin website.
Token Distribution information
There is a total supply of 100,000,000 Value Coin tokens being issued during the crowdsale. They will be distributed one or two weeks after the end of the crowdsale.
The Value Coin team has stated that 90% of funds will go directly to the fund, while 10% will be used to create the platform, pay developers, and provide initial liquidity of Value Coin tokens.
Use of Crowdsale Proceeds
Of the total 100 million Value Coin tokens, 90 million tokens are available to the public during the crowdsale. 10 million tokens have previously been sold to pre-ICO investors.
Joaquin Grech, CEO and Investment Manager
Joaquin studied value investing at Columbia Business School and has his MBA from IE Business School and Computer Science at New York University. He is an entrepreneur and investor with more than 15 years of experience in finance and technology. Before Value Coin, he worked as a technology consultant in the financial industry and founded Echoboom Apps, a mobile app development company and consultancy.
Eduardo Huarte, Marketing Advisor
Eduardo is the marketing director at Wannajump incubator in Madrid, Spain. He has his MBA from IE Business School in Madrid and has a strong track record leading multifunctional teams and managing multi-million-dollar budgets. Before Wannajump, he worked for various companies as the chief marketing officer.
Maria Jesus Oneto, PR and Corporate Advisor
Maria is the director at Talamo RSE, a management consulting company in Lima, Peru. She has over ten years of experience in corporate affairs and has her master’s degree in corporate communications, image and advertisement from EAE Business School in Barcelona. She specializes in corporate social responsibility and internal communications. Before Talamo RSE, she held various corporate affairs positions for British American Tobacco and Kimberly-Clark.
ICO Alert: How does the Value Coin token function within the platform and why is it needed?
Joaquin Grech, CEO and Investment Manager: The Value Coin token creation process is organized around the Ethereum blockchain using the ERC-20 standard. We found several reasons as to why this project was needed:
Safeguard your crypto investments: The current cryptocurrency and ICO environment is very volatile. It’s not strange to see movements of 30% up and down in a matter of days. While many are fine with this roller coaster, we found a large number of people worried about their cryptocurrencies, but at the same time, not willing to give up on them for cash. That’s where Value Coin comes in. Since the tokens are backed by real assets (shares in listed companies), they should not fall in value more than the value of the real assets. This way, we achieve the objective of limiting volatility and downside risk, while not capping the potential increase of the value of your tokens.
2. The need for liquidity and without fiat currency involved: This is a requirement for many, which could be due to the fiscal benefits (you trade your Value Coin tokens, not cash), or due to an emergency (getting your money out of a regular investment fund may take days or weeks, while selling your tokens can be practically instantaneous).
3. Diversification: We found that many people own one or two cryptocurrencies. The way most are beginning to diversify is by participating in ICOs. While most ICOs focus on growing their own companies and your tokens may be an afterthought, our main focus is growing your investment. Since we are an investment fund, by definition, we diversify your tokens among different companies, reducing your risk and volatility.
4. International exposure: People from many countries have no easy access to invest worldwide. As an example, we have interest from Venezuelan residents who cannot easily invest in foreign entities due to the blockage imposed by regulators in their country. Many are in a similar situation and having the option to use Bitcoin, Ethereum, or Litecoin as a gateway for international diversification is great news to them.
We suggest reading our whitepaper for further details.
ICO Alert: The Value Coin Fund claims 29% annual returns since 2008. Is this on average and can you verify these returns for potential investors?
Value Coin: Joaquin Grech, our CEO and Investment Manager, has studied value investing at Columbia Business School in New York. He was a prodigy child focusing on technology and finance (graduated from NYU in computer science). Joaquin has founded several tech companies and worked on Wall Street. Until now, Joaquin has been a private investor managing the funds of friends and family obtaining, as you well said, 29% average annual returns. We cannot verify the returns on these accounts, at least not in the traditional way because you can’t audit the accounts of a third party without their permission.
So how do we build trust? You can verify his returns on the Internet. Joaquin Grech has made his social network posts publicly available and easily accessible for anyone looking to do some due diligence. His Motley Fool investment public profile shows over 800 investment picks throughout the years, and he is ranked in the 99.5 percentile. His blog, Twitter and Facebook feed clearly show he is talented as an investor. Publicly recommending Intuitive Surgical, Eaton, Nvidia, Ctrip, Kite Pharma, Yandex and many others before they multiplied their price several times. Therefore, anyone deciding to participate in the Value Coin ICO is certainly making a leap of faith with us, but we think they will be as rewarded as everyone who has invested with Joaquin has benefited.
ICO Alert: What is an example of a company that Value Coin would look at for investment and why?
Value Coin: We look at purchasing small to mid-size publicly listed company shares at a significant discount to what we believe to be its intrinsic value. Let me show why with the following graph:
As you can see, small company stocks have outperformed every other kind of investment over the long run. And that’s just picking the average. If we select only companies that we believe to be undervalued, we feel we can outperform the average.
Now, let me give you not one, but two examples with a very short summary. First, Linamar Corporation, which is a Canadian company focused on the production of powertrain systems for vehicles. The company keeps increasing sales year over year, but the market is worried about its future because of the arrival of the EV (electric vehicle). We wonder why the market assumes Linamar can’t get into the EV industry. Second, Aryzta, which is a Swiss food company that made a bad acquisition that has punished earnings and its stock price. We believe the new CEO will sell this part of the business shortly. To us, they are great investments because they are both small to mid-size companies, under a temporary hiccup, underfollowed by analysts, that we find undervalued, and with the potential to double in the next few years. Obviously, do your own due diligence, as this is by no means investment advice.
ICO Alert: The ICO landscape is currently in a grey area in many countries around the world. Will you be selling to U.S. investor, and is Value Coin Fund a regulated fund?
Value Coin: Yes! As of this week, we are accepting U.S. investors. As you pointed out, the ICO landscape is currently in a grey area or blatantly illegal in some countries. We are not based in the U.S. and therefore we don’t depend on its regulatory bodies to validate our business model, but we found it complex (legally speaking) to accept U.S. investors until recently. To complicate matters more, since cryptocurrency transactions are anonymous, we have no way to know the nationality or source of the tokens. We will be a regulated fund and we will always comply with the law. The regulatory landscape is constantly evolving and it is the investor’s responsibility to accept these terms and obey the laws governing their countries.
It’s also important to note that since we are an investment fund, the money belongs to you. All money raised always belongs to the owners of the tokens, we are just investing the proceeds on their behalf. In the worst case scenario of a regulatory change where we would need to close the fund, that portfolio would be sold and all money (plus benefits fees) will be returned in Ethereum to its rightful token owners. That’s exactly what we mean when we say your cryptocurrency is backed by real assets.
ICO Alert: Value Coin offers an avenue into the stock market for those who may not currently be invested in traditional finance. How does Value Coin stand up to the competition in the traditional finance space?
Value Coin: We stand up to the top 1%. We follow value investing investment principles, of which are known to generate the greatest long-term returns. The most known figure following these principles is Warren Buffett, who was able to achieve over 40% annual returns for almost two decades. Currently, the best funds generate around 15% annual returns. There is a reason for this: size. Large investment funds have too much money to be able to easily move in and out of the market without impacting their own investments. With size comes difficulty and underperformance. That’s why Value Coin Fund has a cap of $50 million. We are a small fund able to invest where the big funds can’t. That clearly plays to our advantage.
ICO Alert: Value Coin charges a 1.5% annual operations fee and a 9% performance fee from the net profits. What does an annual operations fee entail and is a 9% performance fee higher or lower than the market standard?
Value Coin: The operations fee is just to cover the minimum costs of running the fund (anything related to operations including lectricity, web hosting, and so on). The performance fee has two purposes. Firstly, consistent with industry practice, we needed to put a performance-based compensation in place to motivate and reward continuous generation of superior risk-adjusted returns. Secondly, we also need to provide liquidity and be able to repurchase Value Coin tokens if they fall under its asset value, hence, setting a floor for its price and helping all token holders. This fee is in place to achieve both. Lastly, if the fund does not generate a profit for a particular year, it goes without saying that we won’t charge a performance fee.
As to whether this fee is higher or lower than market standard, it’s not a simple question to answer since we are talking worldwide here. We’ve seen funds charge up to 40% performance fees, and some charging 5%. Additionally, as far as we know we, are the first ones who are issuing a cryptocurrency that needs to provide liquidity to those tokens. Therefore, in traditional finance, we would say our fee is on the lower range of market standards, understanding we have no known comparison for a crypto based investment fund.
ICO Alert: How large is the Value Coin Fund team? What is the process by which the employees co-invest in what the Fund is invested in and why does it take place?
Value Coin: We currently have three members on the team. Maria Jesus Oneto is our corporate advisor, Eduardo Huarte is in charge of marketing, and Joaquin Grech is our CEO and investment manager. Luckily, as an investment fund, we can focus on what we do best and outsource everything that is not part of the core business.
To answer your second question, a central tenet of our fund’s philosophy is to ensure that interests among participants and management are optimally aligned. Every employee of our fund is required to have a minimum of 70% of his/her liquid assets invested in the fund. Hence, employees co-invest alongside all participants and are collectively exposed to the same risks and share the same outcomes. Joaquin Grech, as the investment manager, will place all of his money in the fund.
ICO Alert: Many cryptocurrency investors and day traders have made significantly more than 29% on their investment. How does Value Coin plan on convincing investors who are traditionally comfortable with higher risks for the opportunity for higher rewards? Is there a focus on raising capital through the ICO with investors who are not familiar with cryptocurrency?
Value Coin: The focus is to raise capital with investors who are familiar with cryptocurrencies. When you participate in an ICO, you are receiving new tokens in exchange for your existing ones. We prefer that those who participate have had some previous experience with a cryptocurrency in order to understand how they work, the risks involved, and how they can buy/sell them without the need for fiat currency to be involved.
Also, existing traders see their performance and feel 29% is “low.” We believe this line of thought can easily lead to financial disaster. There are many traders out there that were just lucky to get into the rising tide of cryptocurrencies, but they have become overconfident and may be readying themselves for a rude awakening. There are also very smart people trading, there is absolutely no doubt about it. If they choose to remain trading cryptocurrency, they will be able to do so with Value Coins and getting in early (through the ICO), will only help them make a bigger profit.
Meanwhile, our fund is designed from the bottom up to limit volatility and risk while generating superior returns in the stock market. We suggest that those who own cryptocurrency think about diversifying some of their investments with us. In any case, it’s not an either/or situation. With Value Coin, you can buy and hold while we work to grow your investment throughout the years, or you can trade the tokens as you have been doing until now.
ICO Alert: As a non-Value Coin question, we like to ask the team for their thoughts on the ICO and cryptocurrency space now and in the near future. The team comes from traditional finance, with a different perspective, so where do you see cryptocurrency/ICOs in the next 3–5 years?
Value Coin: We think that cryptocurrencies are now evolving into two branches:
Older and established cryptocurrencies, like Bitcoin, that are going through growing pains, a saturated network, not-so-speedy verification, energy consumption, and other issues that were not there before they became so popular.
Newer cryptocurrencies with improved algorithms that try to solve the limitations of the older cryptocurrencies, while adding new functionalities. We wouldn’t be surprised if some of the newer ones surpassed the value of Bitcoin in the not so distant future. This could provoke a big shakeup (and increase volatility further) in cryptocurrencies we were already comfortable with.
As for the ICO space, it’s a relatively new phenomenon. Our feeling is that it will slow down once the market gets saturated. Similar to what happened with crowdfunding campaigns in Kickstarter/Indiegogo. It’s also clear that government will try to regulate them somehow, the same way they are trying with cryptocurrencies. We have conflicting feelings about this. We think some regulation may be good and help the overall community, but at the same time, everything is thriving thanks to the work of innovators without much limitation from the establishment. In any case, we are sure that both cryptocurrencies and ICOs are here to stay because they both bring clear benefits to everyone.
View the Value Coin Website here.
View the only comprehensive list of active and upcoming ICOs here.
(1) Value Coin Website, Value Coin, (2017)
(2) Value Coin Whitepaper, Value Coin, (2017)