It’s no secret: there’s a lot of noise in the cryptotoken world.
No matter who you are, it’s hard to decipher between projects that are game-changing and those that are problematic, questionable, and scammy money-grabs.
While running the benjaCoinICO this summer, I was eager to share the experience especially as it related to the topics of governance and regulation. Tens of thousands of people read The SEC Called About Our ICO, I Answered, and it wasn’t long before I was invited to be an advisor on a number of projects.
At first, I was hesitant. I weighed a lot of different questions, the most important of which were these: how do I choose which projects to work on, and what value can I offer? These are not easy questions to answer. I asked to read white papers, I had coffee with founders, and I entertained different levels of involvement.
The purpose of this post is to share why, what I found in the projects I work with today, and what value I’m delivering. I hope this serves as a data-point for advisors and token-issuers alike as they consider advisory relationships.
My four commandments of crypto advising:
There needs to be a real product where I can clearly see why a cryptotoken is necessary. I have no interest in projects that are issuing tokens as a simple fundraising mechanism when the action (transaction or otherwise) could be completed via BTC or ETH.
The project needs a capable team, preferably one that has built something together. The longer they’ve known each other, the better. I would argue the founder relationship is more important with the added implications of a blockchain-based business.
The team needs to bring up good governance in our first conversation, and they have to agree to be good actors. No securities per the Howey Test, regardless of whether the project is located in the United States. I consider the Howey to be a good guideline in all jurisdictions.
There has to be a clear reason why I’m the person who they reached out to, and I have to deliver real value to the project. I’m not interested in simply being a name on a team page — I want to be involved and I want to know that I’m contributing.