Traditional venture capital firms typically take 6 to 12 months to provide funding.
The co-founder of blockchain startup Gnosis, Martin Koppelmann has disclosed that the company has decided to leave most of its remaining currency untouched for a year in the wake of its initial digital currency sale that raised $12.5 million in just 12 minutes.
On Monday, Gibraltar-registered Gnosis, sold 5% of its 10 million GNO tokens to investors for $30 each and in the process raised $12.5 million in 12 minutes which makes it the most expensive digital currency ever offered in an initial sale, said Koppelmann.
Despite the hike in the asking price, the offering was oversubscribed, with the company having to turn away $3 million in additional bids, revealed Koppelmann.
He went on to add, “It wasn’t ethically responsible to accept those additional bids because we had already reached our capital target.”
As per Koppelmann, after the offering, Gnosis still holds 95% of its tokens, and as a result its valued at more than $300 million.
He disclosed that 4% of the total tokens would be distributed to its employees and founders over a span of 4 years while the remaining 91% will be locked up safely for at least a year.
“At some point, we may need to raise more money through another token sale, but that won’t be for another 1-1/2 to two years.”
Koppelmann revealed that around two-thirds of investors came from outside the United States.
Selling digital tokens to raise capital is a growing trend among blockchain startups. While the average time frame to raise capital through the sale of tokens is typically 30 days, the really popular ones get funding from anywhere under a minute to 30 minutes.
In contrast if a startup were to go through a traditional venture capital firm, it would take anywhere between 6 to 12 months to get funding.
Gnosis was built on the public blockchain Ethereum, an open-source blockchain similar to the bitcoin network. Its platform enables individuals and companies to create prediction markets for any event.