BIOCOIN ICO –synergy of technologies: blockchain & biotech venture funding

author – Andrew Zaichenko (https://www.linkedin.com/in/gnosteek); Ukraine, Kyiv, 10/10/17

dear Yury,

dear Sirs,

due to your initial positive feedback regarding my CV there was a great period of investigation the

industry that you are lucky to be in! my strong intention to get into the industry was born – thank you!

there gonna be two parts of the message which difference is within the level of impact we are going to

provide the industry with:

I. the team is going to raise funding as a venture fund to proceed with further successful

investments into a range of projects (or a single one?);

II. the team is going to disrupt the industry by providing its participants with a new level of the

platform to interact one with another.

the guess is that initial plan is to use ICO as a funding tool. thus let’s start with the first part.

let me put a little disclaimer at the beginning: you can find the document which is developed on a basis of

many assumptions which should be turned into hard facts to proceed with an accurate business plan.

efficient and successful ICO launch needs such crucial components as:

1. compliance

it is put on the first place because of its importance in terms of the market we are going to play

on; US is the biggest one but it is tough regulated one also – SEC has been hunting “bad luck”

projects already and it’s just a beginning.

if we plan to enter US market and to let US investors to participate in ICO the core thing to

understand and take into consideration is:

if ICO provides token as a share/security – ICO gonna deep into all securities’ shit which IPO goes

into. thus the task is to avoid such a security description and clear the business mechanics of

share and revenue distribution function due to a token we are going to issue. which is a pretty

challenging task in case of a venture fund which is going to get fundraising .

the main tool to test your token nature is Howey Test, which roots come into 20th century and

counts… 71 years – government is so fucking flexible and tech savvy, isn’t it? BTW there are also

several support tests e.g. Family Resemblance test. please find additional information here.

ANYWAY – there should be STRONG compliance expertise involved (here is one of my Linkedin

contacts, who can be pretty much useful due to his focused expertise and experience – no

advertisement )) just sharing). but again… it depends on the audience we are going to propose

the token to – if the target audience is “institutional investor” there is a definite need to follow

all regulations, if we speak about individuals who are starving to enter biotech market – there is

a lot of ways to invest despite SEC rules as we speak about cryptology (moreover e.g. lots of

Chinese investors use offshore attitude to stay on crypto-market despite government ban…

which is quite temporary one but still) – just put a right disclaimer onto all materials:

“NO US CITIZENS ALLOWED TO INVEST”.

BIOCOIN ICO –synergy of technologies: blockchain & biotech venture funding

author – Andrew Zaichenko (https://www.linkedin.com/in/gnosteek); Ukraine, Kyiv, 10/10/17

to solve compliance task is a very important one also because of the reason to provide liquidity

to the asset which is possible due to listing on crypto-exchanges. these organizations are put into

a high voltage attention of many governments worldwide in terms of compliance both of their

own and their clients (coins/tokens producers). again – it depends on the strategy we are going

to follow and the market we are going to cover.

there is also an important task to fix appropriate jurisdiction for incorporation. to be a solid one

within US = Delaware: it is not only the leading corporations’ center, but a real example of tech

savvy state initiative, which could be used as smth middle between old and new paradigm.

alternative (and personally preferable one) jurisdiction could be Singapore – great and

honorable Mr. Lee Kuan Yew’s creature, which has numbers of governmental programs to

support financial initiatives while its central bank has launched Ethereum-based tokenized

version of SGP dollar (project “Ubin”, which has just made its next step recently).

the last but not least – transparent, easy to understand dividends spreading policy which could

be used as a marketing tool also (see below). it was mentioned in my report which had been

developed under request of WishFinance CEO – they have a little bit blurred mechanics of

payouts which definitely damages business (of course, when we speak about long term

perspective but not a hype money collecting… which seems to be 95% for the present! thus we

should be strongly positioned as a long term partner with serious reputation – see “team” part

below – and intention).

2. marketing:

the proposition is to pass all the standard pack which ICO should include just in several mass

rows, which, of course, should be developed precisely within team:

whitepaper,

one pager,

landing page / main domain sub-page,

roadmap,

ICO passport (start, end, total quantity etc.) and distribution structure,

bonuses scheme,

social media interaction,

press and investor outreach,

bounty program,

special events.

all above mentioned is about tools to use, about form, which is almost similar from one ICO

campaign to another. the key thing is what kind of essence will be put inside of these tools – this

is the art and creative work to find the way to potential investors. thus please find some hints

below, which will put the basis and strengthen marketing component of the campaign:

BLOCKCHAIN-BIOTECH SYNERGY:

non-institutional investors will include blockchain- and crypto-tech adopters largely – thus the

main focus should be done on the message that BLOCKCHAIN gets a brand new industry to

utilize its power within;

BIOCOIN ICO –synergy of technologies: blockchain & biotech venture funding

author – Andrew Zaichenko (https://www.linkedin.com/in/gnosteek); Ukraine, Kyiv, 10/10/17

PIONEERING:

the fact is that Biocoin is THE FIRST token within biotech venturing and a real pusher of the

industry – THIS IS JUST GREAT NEWS FOR BOTH INDUSTRIES, and this only fact can attract 50%

of targeted hard cap (if it is going to be hard which is personally preferable one)!

there is the first biotech company which has launched ICO already (do not take into

consideration Encrypgen as soon as the result was too poor as for ICO market – just a little bit

above USD 1 M) – ARNA (please fix this example to recollect in the second part of the message,

disruptive one) – but this is about a single player from the market’s participant side but not an

investor side (which is not a producer but funding side); the thing is that blockchain is easier

taken as a fintech tool rather than any other sector implementation – this should be taken into

consideration and put together with the next key message (partnership), describing DIRECT

connection of specialized venture capitalist EXPERTISE and a crowd source of the capital WITH

NO INTERMEDIARY – it is extremely important to push the message of democratizing,

decentralizing of funding process (but a full power of this feature can be utilized only in case

from the second part of this message, disruptive one).

PARTNERSHIP:

there should clear message that anybody can become VENTURE CAPITALIST, the fund PARTNER

through a simple token acquisition. the status is a very trendy thing nowadays, isn’t it?

all participants (or some part of early adopters) of ICO will get special status, which provides

them with a certain pool of preferences e.g. internal analytics, newsletters, special offers (in case

of lifespan products launch), special events participation etc. – added value to stand out them.

TRANSPERENCY:

as it was mentioned previously, there should be a simple, transparent way to get pay outs from

fund’s investment activity as soon as profits come… and as soon as investment cycle is a big one

within the industry (3-4 years as a minimum-minimum, 5-7 as a middle range, 7-15 as a normal

range at least in case of bio-pharm) – that is an issue to discuss; e.g. (a) there are some current

projects which the team has and which could provide investors with profits (some basic level for

the first xx months) or (b)there could be a certain ICO structuring, which presupposes reserving

as it was done in case of Blackmoon and its 30% Downside Protection.

transparency both of operating and investment activities should be put in place. initial level of

crowd’s trust regarding industry expertise should be fixed and multiplied through results which

the team perform in a certain period. as well as managerial team should perform a high

efficiency of operating activity in terms of expenditures/revenue ratio. “open book”-concept will

become a standard attitude in the industry soon. let’s be the first. blockchain is about

democracy and transparency – it should be proved by action and become a part of marketing

strategy. there is a nice tool called “escrow” also but again – it is more about true

decentralization which the second part of the message includes.

there should mentioned also an example of ICO-ecosystem freewill initiative, which possibly can

become a global trend after numbers of unscrupulous ICOs/teams, which will disappear from the

market with no results but with all resources collected from the crowd.

BIOCOIN ICO –synergy of technologies: blockchain & biotech venture funding

author – Andrew Zaichenko (https://www.linkedin.com/in/gnosteek); Ukraine, Kyiv, 10/10/17

MARKET INPUTS and STRONG DIGITS (all below digits should be investigated precisely):

of course, marketing strategy needs our JOINT efforts to be developed according to the project

owners view, but, as Steve Jobs said “It doesn’t make sense to hire smart people and then tell

them what to do; we hire smart people so they can tell us what to do.” thus let it be mentioned

one more time that target audience will consist of tech-savvy blockchain and crypto-adopters

largely, WHOSE CORE understanding lays within IT market basically. thus the proposition is to

provide target audience with a “biotech-IT “-comparison, which will make it easy to understand

how cool the biotech is.

there should be the understanding of the market mechanics to avoid blind investments. parallel

should be drawn in terms of OUTSOURCING model (similar to IT), which biotech market has

been starting to use in a recent time: 65% of development is done by start-ups while big pharma

is concentrated on production and distribution only (up to 70%). it means we are similar to IT –

it taught us, thanks!

market size – 1.5 trillion (2016) and it is the most dynamic one for the past 20 years.

market stable growth – 10% a year.

profitability (2006-2010): IT – 3%, biotech – 15.9%.

venture capital within pharm and biotech (of a total) – 45%.

average venture investments multiple ratio (US, 2014) – 9x (ROI = 800%).

important: venture risks are declining due to technologies development = stable growth of

positive decision making from regulators side: 2008 – 40% requests to regulators got success,

2012 – 60% requests to regulators got success.

population is growing and becoming older with stable growth of healthcare expenditures. for

instance, according to PricewaterhouseCoopers, the rise up by 6.5 % will take place in US during

2017. there must be the focus on the nature of such healthcare expenditures – they are NOT

DISCRETE which means they will not be cut in case of economy goes down. it is not about

stability, but a stable permanent growth.

SOCIAL INITIATIVE:

there is no doubt that a perfect venture capitalist is a machine which key target is the profit, BUT

if we go to the crowd there should be two must have emotional components: the first is social

initiative. it could be provided via type of:

scholarship (colleges, universities),

grant (single scientists or a group of),

sponsorship (vaccination programs, consequences of disasters funds, events etc.).

WORLD CHANGING IMPACT:

the second emotional component is to fix the image of the team (including each and every

investor from the crowd), which improve the world in general, making planet’s population

health better, life better, of full value and LOOOOOOOOOOOOOOOONGER. come and join us!

just a hint: insert partners’ services to get cross-audience and cross-sales – e.g. Civic, which has

used quite interesting marketing attitude to cut marketing costs while reaching impressive

results during ICO. such contacts will improve our blockchain evangelist’s image – important!!!

BIOCOIN ICO –synergy of technologies: blockchain & biotech venture funding

author – Andrew Zaichenko (https://www.linkedin.com/in/gnosteek); Ukraine, Kyiv, 10/10/17

3. tech – how to issue and where to put on trade:

a lack of programming experience will force to put this component into arms of an appropriate

specialist; the only comment is to use ERC20 standard, which has some issues, but still its

interoperating nature makes it more liquid and useful for the whole Ethereum ecosystem, which

is a very important factor to pay attention to.

the token can be issued/programmed as:

by in-house tech-specialists,

with an assistance of a platform like Ambisafe (Ethereum eco-system) or Waves (with its

internal ecosystem, which is not preferable, but is quite enough in some cases).

listing – is a cross-road of tech and marketing. there could be used as free of charge, as payment

listing option (which quite expensive sometimes – USD 2 grands per day); liquidity is a must have

characteristics but there could be used the strategy to warm up the token by our own means

through a “to the moon” ICO-campaign, which will open doors to leading exchanges naturally.

4. team:

there are two parts of this component: face and back-office. the face one is just great according

to the info which was taken from biocoin site (which should be revised asap; there was one

upgrade mentioned recently: why Tesla left it!? he is Master of nowadays still! true Man!)

the only comment for the moment – more results in terms of projects completed with digits

(Yury, the is no doubt that you have got a brilliant portfolio of companies which were funded

due to you – names and success stories). there is an example of a good performance – Atlas.

back-office: there should be preliminary discussion regarding the scheme we are going to use for

the launch because e.g. there can be used a partner to launch ICO like ICOBox – they have a list

of success stories already with an efficient base of potential byers, pool of institutional investors

(US market) on the background. such partners will cut some needs in terms of staff (but not

expenses), which will need the only ICO lead, who will take all responsibility into a single pair of

hands (with a head in the set of course). BUT the proposition is to have our own marketing team

(community-, PR-, bounty-managers, designer, content producer and editor, targeting and

context guru) at any case because such service providers do not understand the specific of our

business in a full mere, which could damage communication with community/investors. they

(SPs) tend to use some kind of template which efficiency has its own limits. team component

needs additional discussion. team is extremely important component. as inside of any business.

dear colleagues, biotech industry has been investigating blockchain tech already and sometimes even

through direct investments into… mining, which is a little bit ridiculous at the first glance but can have

some hidden plans (because efficient data processing is extremely useful skill). big pharma has been

starting its game within a new born blockchain industry in certain areas already. healthcare bosses as

understand, as are going to employ the tech too – it is a sign. there is no doubt that ICO will collect a near

standard venture fund cap USD 100M (just correct USD 300k pre-sale – it is TOO little one, even

suspicious!). but to beat Third Rock Ventures (USD 616M), SV Health Investors (USD 400 M), Pivotal

bioVenture Partners (USD 300 M) etc. and get a LION piece of the market there should be alternative

attitude deployed and readiness to become a true disrupter, new paradigm provider – to let the crowd

rule the world due to its capital, due to its expertise – it is about the second part of the message. amen :)