Written by Peter Keay

Senior Architect / Director of Globalization @ICO Alert, host @Bitgenstein's Table: Crypto Philosophy Podcast. Blockchain industry writer, marketer, programmer
July 18 2018

Moonlighting Security Token Offering - ICO Alert Report


Read an exclusive Q&A and Moonlighting financial and business details, brief investor and team profiles, restrictions, and more.

 
 

Moonlighting is a Security Token Offering raising funds under Regulations D & S.

For U.S. citizens to contribute to the Moonlighting STO, they must be accredited investors. Citizens of other countries must be equivalent to accredited investors.

Quick Research:

The Business So Far

  • Moonlighting is an online employment marketplace for freelancers.
  • Moonlighting has been live since its 2014 alpha/beta and 2015 full launch: www.moonlighting.com.
  • The Moonlighting app has been a top 10 mobile app in Apple’s “Jobs” category for over two years.
  • Moonlighting has raised over $6 million in equity financing from investors like media giants Gannett, Tronc, and McClatchy.
 
From the Moonlighting pitch deck (available on Moonlighting’s Entoro page).
  • Plans are to integrate blockchain for User Profiles (reviews, recommendations, education, licensing credentials) and allow freelancers to port their profile to any employment marketplace in the gig economy.
  • Read the Moonlighting Pitch Deck at Moonlighting’s Entoro page.

The Security Token Offering

  • The STO is selling Simple Agreements for Future Equity with Token Allocation (SAFE-Ts).
  • The minimum investment is $100,000, with a target seed raise of $25,000,000 and a sale hard cap of $40,000,000.
  • SAFE-Ts are being issued with the following discounts: 20% discount for a Purchase Amount of $100,000 to $499,999; 25% discount for a Purchase Amount of $500,000 to $999,999; 30% discount for a Purchase Amount of $1,000,000 or more.

The Financials

  • Income statement summary:
 
  • Balance sheet summary:
 

Media Mentions

Over the past four years, Moonlighting has been featured in Forbes (twice), the Wall Street Journal, Success magazine, Entrepreneur, Fox News, and the Huffington Post, in addition to leading blockchain and cryptocurrency publications.

Moonlighting has a press site chronicling their journey from 2014 to the present at blog.moonlighting.com/category/press. There, you can find multiple articles by Moonlighting and by media companies about Moonlighting from 2014 to 2018.

Exclusive Q&A with Jeff Tennery, Founder and CEO of Moonlighting

ICO Alert: What is Moonlighting?

Moonlighting: One of the fastest growing freelance marketplaces in the world. Backed by the three largest news media companies in the U.S., Moonlighting is adding blockchain technology to a robust on-demand hiring platform that boasts of 650,000+ freelancers to scale worldwide.

ICO Alert: What major factors led you to decide to tokenize Moonlighting equity?

Moonlighting: We love the idea of sharing in the success of our platform by issuing a security token that pays a royalty quarterly based on our revenues.

ICO Alert: Besides the Moonlighting Security Token, you plan to bring a number of the Moonlighting platform’s functionality onto the blockchain. Will you have a utility token for that purpose? How will it work?

Moonlighting: Our plan is to issue a security token for investors in Q3 2018 and provide a separate utility token to our growing base of users worldwide in 2019.
 
Note this is NOT the security token but the model for an upcoming utility token. From the Moonlighting pitch deck.

ICO Alert: Moonlighting boasts 650,000 users. Are those monthly active users? Can you provide other metrics that show how active they are using the platform? What percentages of your users are made up of freelancers and job posters?

Moonlighting: Over 30% of our freelancers use both sides of our two-sided marketplace. Meaning they promote their services to be hired, and then turn around and use our platform to recruit and hire themselves.
For example, we have freelance developers hiring CPAs to conduct their taxes and then get hired to build that accountants personal website. It’s the symmetry you look for in a liquid marketplace and shows the community feel our platform presents to our user base. Two tools for the price of one.

ICO Alert: Moonlighting has been operating since 2014 and potential investors can see an outline of the company’s history at sto.moonlighting.com/#roadmap. What other sources would you point to as excellent information on Moonlighting’s history?

Moonlighting: We would encourage users to simply google “Moonlighting App” and see the rich four year history we have in empowering people to work on their own. You can also find where we proudly showcase that history here: blog.moonlighting.com/category/press. You can also find us listed in over 150 news media sites around the country including the Chicago Tribune, LA Times, Miami Herald and USA Today.

ICO Alert: Is there a lockup period for the Moonlighting security token?

Moonlighting: Yes. There is a 12-month holding period which supports how the U.S. SEC would like to see these offered. We are in this for the long haul and are seeking accredited investors who value our long-term vision and share our plan to be a longstanding winner in the $1 trillion freelance industry.

ICO Alert: Your FAQ says that “Moonlighting has raised over $6.3M in traditional equity financing led by three publicly traded strategic investors who are leveraging the platform to resurrect their traditional classifieds business.” What will your Security Token Offering mean for these investors and their share of Moonlighting equity?

Moonlighting: This is not an equity token, but does have liquidity that traditional equity does not provide and a quarterly royalty payment based on the revenues of the company.

ICO Alert: According to your FAQ, Moonlighting “will allow users to port their profile to any employment marketplace in the gig economy.”

I worked for 10 years on several freelancer platforms — and was expelled from Upwork unjustly due to a client’s behavior. Upwork sent me an email saying, “We are unlikely to respond to any further correspondence.”

This could cripple a freelancer. What recourse would I have if I used Moonlighting across multiple platforms and a similar situation occurred?

Moonlighting: Our model is much different than Upwork and is far more favorable to freelancers.
 
We wear the hat of the freelancer and want you to earn and keep as much as you can. Our model is intended to be affordable, ($10-$20 per month subscription) so that you can conduct business and take advantage of our full suite of tools to run your business.
Part of our blockchain plan is to be the one-stop-shop for your profile and allow you to take your Moonlighting profile and our tools with you wherever you choose. We can’t control what other marketplaces will do but we plan to partner with companies that share in our vision, or let you decide whether you want single sign on with that platform so you can make that decision on your own.

ICO Alert: A number of professionals in the space predict a huge growth of security tokens. Some say STOs will be larger than all other kinds of tokens combined in under a year.

Yet there is still a great deal of uncertainty around regulation, security, tokenomics, and so on. As a non-Moonlighting question, what do you foresee happening in the security token space?

Moonlighting: In 2017, billions were raised on the promise of a token and/or platform and no real product, customers or revenue. Many of those projects were nascent and had an 18–24 month timeline to become real. SAFT agreements were used because there wasn’t even a token or coin to be issued.
In 2018, companies like Moonlighting with real revenue, real customers and a real product are making it safer to invest in blockchain. Like traditional investing, diversifying your blockchain portfolio outside of high-risk utility tokens makes sense and provides a new avenue to participate in great blockchain companies who want to share in the company’s revenue success and comply with U.S. Securities Law.

ICO Alert: What else do you think potential investors should know about Moonlighting?

Moonlighting: We have spent four years addressing one of the biggest challenges facing the entire labor force. While unemployment statistics suggest that the labor market is sound, there is a widening earnings gap that leaves 95% of the world upside down on savings and debt. Wages in the U.S. have not gone up in two decades, while debt has risen for education, housing, and the cost of food, fuel and other living expenses have gone up exponentially. That gap can only be made up with new, secondary opportunities to earn which comes from freelancing or generating income from a separate business or source.
Moonlighting has built a platform that solves this problem by providing alternative forms of income for the masses. With our team, traction and a strong blockchain plan in place, we have a platform that will become the household name for hiring worldwide.

The Moonlighting Team

 

Jeff Tennery, CEO

Jeff’s LinkedIn profile claims “over 30 years of leadership in mobile & digital media.”

After seven years as Senior Vice President at AOL, Jeff founded Moonlighting in 2014.

You can read Jeff’s article about Moonlighting, “Meet the New Kids on the Blockchain,” on LinkedIn.


 

Ritesh Johan, CTO

Ritesh has 16+ years of expertise with various aspects of software architecture, design, development, process and methodology.

His experience includes over 10 years as Technical Lead and Software/Application Architect at places like Capital One and the Federal Reserve Bank of Richmond.


 

Roy Slater, COO

Roy Slater (BPM, CSM) was previously an Operations Manager at Capital One and a Team Manager at Lending Tree.

Roy has been Moonlighting’s Chief Operating Officer since 2014.

 
For details on other Moonlighting team members, see sto.moonlighting.com/#team.

The Moonlighting Board and Advisors

 

Moonlighting’s Board and Advisors include a number of well-known names in the space. More details, including LinkedIn profile links, for these and other board members and advisors are available at sto.moonlighting.com.

Moonlighting Roadmap and Current Investors

 
Excerpt from the Moonlighting roadmap. For earlier history, visit sto.moonlighting.com/#roadmap.

Moonlighting is backed by the three largest news media companies in the U.S. (Gannett, Tronc, and McClatchy), who invested in 2015–2016.

Measured by circulation, Gannett is the largest U.S. newspaper publisher and posted revenue of $3.15 billion in 2017. In addition to a number of local newspapers, Gannett owns USA Today.

Tronc, formerly the publishing division at Tribune Media, is the nation’s second-largest newspaper publisher, holding publications like the Chicago Tribune and the Los Angeles Times, and posted revenue of $1.6 billion in 2016.

The McClatchy Company has 29 daily newspapers and some additional media assets, with revenue of $977 million in 2017.

Financials and Offering Documents

Moonlighting’s PPM and Offering Documents, including financials and the complete terms of the Moonlighting Security Token Offering, are available from Entoro.

 

Regulatory Compliance and How to Contribute

A Security Token Offering follows U.S. Regulations. For investors who value compliance, this is a great way to invest in blockchain without some of the risk associated with utility token ICOs.

In the United States, security offerings must be registered with the Securities and Exchange Commission (SEC), unless the sale follows the guidelines of one of the exemptions provided for under the SEC JOBS ACT.

Two such exemptions are Regulation D and Regulation S. These exemptions can be coupled, and so Moonlighting is raising under both.

Regulation S Restrictions for Moonlighting Tokens

Regulation S raises are for non-U.S. investors only.

Moonlighting’s security tokens are not being offered in China, except as pursuant to China’s securities laws.

United Kingdom investors must be: 1) investments professionals, 2) persons or entities described in Article 49 of the FPO, and 3) certified sophisticated investors (Article 50(1) of the FPO), as well as “relevant persons” — others to whom this offering may be lawfully communicated under UK law.

This security is not being offering to any resident of, or any person located or domiciled in, Cuba, Iran, North Korea, Syria, the Crimea region, or any other country or territory subject to country-wide or territory-wide sanctions.

For further information, see Moonlighting’s Offering Documents.

Regulation D Restrictions

Regulation D raises are for accredited investors only. Generally, accredited investors have had an income of more than $200,000 per year (or jointly with a spouse, $300,000) for the past two years or have assets totaling $1 million or more (again, jointly with spouse), not including their primary residence.

Note: Even within Regulation D, this security is not being offered to any resident of, or person located or domiciled in, the states of New York, South Carolina, or Washington, including corporations and partnerships organized in these states.

How to Be Certified Accredited

 
Verification for the Moonlighting Security Token Offering on the Entoro platform.

If you qualify for this Security Token Offering and have not yet participated in an offering open only to accredited investors, you might be surprised to hear that there is no official government or certifying body, no certification exam, and no certificate or official piece of paper involved. It is up to the company performing the Security Token Offering to determine your status before selling you tokens.

That said, the SEC does require more than simply checking a box. Moonlighting is raising funds on the Entoro platform. In order to participate, you will need to do one of the following:

  • Get the provided verification form signed by your banker or other institution that can verify you meet the qualifications, or
  • Use EarlyIQ, a third-party verification service used by Moonlighting, or
  • Email in verification documents you have completed previously.

How to Contribute

Please see sto.moonlighting.com for investor instructions for Entoro’s Offerboard.

If you haven’t invested in an offering on Entoro before, you’ll need to create an account, submit identifying information, and verify your status as an accredited investor.

 

Find Out More

Get in touch with Moonlighting on Twitter, Telegram, or Medium.

View the Moonlighting Token Sale website here. The live Moonlighting platform website is here.

View the only comprehensive list of active and upcoming Initial Coin Offerings (ICOs) here.

References

  1. Moonlighting Platform Website, Moonlighting (2018)
    https://moonlighting.com
  2. Moonlighting Security Token Offering website, Moonlighting (2018)
    https://sto.moonlighting.com
  3. Moonlighting Pitch Deck, Moonlighting (2018)
    Available via the Entoro Offerboard (signup required)
  4. Moonlighting Offering Documents, Moonlighting (2018)
    Available via the Entoro Offerboard (upon qualified request)
  5. Moonlighting Whitepaper, Moonlighting (2018)
    Available via the Entoro Offerboard (upon qualified request)

Topics: ICO, Sto, Freelancing, Gig Economy, Investing, Report