The EQUI proposition is, conceptually, a very simple one – the project team is creating a token-based platform that will marry up investors with innovative technology start-ups. Those start-ups will receive injections of funds in the form of the platform’s native EQUI token, investors will receive a share in the future profits of that enterprise in the form of Ether.
The EQUI initiative is one of the more high-profile projects currently out there in ICO-land because of the high-profile personalities behind it – Scottish billionaire Doug Barrowman who is leading up the project and his partner, celebrity and television figure Barnoness Michelle Mone, a successful business figure in her own right.
A refreshingly tidy, professional and well-edited document, the white-paper lays out the case for its business model in a simple and clearly presented manner. This is not a technical document – it doesn’t need to be, the implementation-aspect of this project will be relatively straight-forward: a website tethered to the Ethereum platform via a suite of dapps which will manage a library of smart-contracts on its behalf.
The white-paper’s core content revolves around its description of the EQUI token which in turn is covered in the Tokenomics section below. In the meantime, the most important takeaway is that holders of EQUI will be placed into three different categories:
Traders: these are simply owners of EQUI token who keep their holdings off-platform in private wallets. These token holders will receive no benefits from the profits that accrue to the EQUI platform. If they are hoping to gain benefit from ownership of the token, it will simply be as a result of any eventual increase in the token’s market value.
Holders: these are owners of EQUI token who store their holdings on-platform, but whose holdings are not invested directly in any of the start-ups that have partnered with the EQUI platform. They will receive some compensation as a reward for keeping the token liquid within the EQUI eco-system.
Investors: these are holders of EQUI token who store their holdings on-platform, and whose holdings have been placed among some of the start-ups operating on the platform. They will receive the largest share of the benefits accruing to tokens from start-ups which become profitable enterprises.
Whilst the white-paper doesn’t do so itself, it is probably best to apply these distinctions to each token itself – if a token is held off-platform, no benefits will accrue to it. If it is held on-platform, the benefits that accrue to it will depend on whether it is simply held on the platform, or invested. It is likely that some, if not most, investors will have tokens that qualify as falling into more than one of the above classifications.
One valid question that should be posed here is: why a token? Could a traditional venture capitalist platform not achieve the same thing? The answer is yes; on the other hand, traditional venture capital is giving way to the ICO model and it appears that Bowman – himself a successful, old-school venture capitalist – recognises the change that is coming.
The project’s roadmap envisages platform completion by the end of Q3 2018 – i.e. no later than six months after its ICO funding round. Given the project’s relatively straight-forward technical implementation, there is no reason to see this as optimistic.
Given the project founder’s background and existing professional network, the other crucial aspect to this project – its partnerships – also seems to carry little risk.
The project’s tokenomics boil down to understanding its profit-sharing scheme which itself is summed up in the diagram which follows:
In summary: to qualify for any share in the profits that EQUI negotiates between itself and the start-ups which are onboarded onto its platform, a token holder will first of all need to keep his own token registered on the EQUI platform itself.
25% of the profits generated by a start-up are kept by the EQUI team itself. 5% are distributed evenly among tokens which are held on the platform but not invested. 70% of profits are distributed evenly among those those tokens which are invested in the project.
It is worth noting further that the EQUI team will be creating EQUI token from thin air on a periodic basis at a rate that is equivalent to 5% of the number of tokens currently in circulation. This is an inflationary coin and newly minted tokens are distributed pro-rata to token holders who have invested their tokens (as opposed to simply holding them either on-platform or off-platform). The idea is to encourage holders to invest rather than allow their token to sit idle.
The founders are high profile media figures who need little introduction to most readers viewing this from the UK. As for the rest of the headline team, it is split into two groups – a project team that consists of a head developer, head marketer and project manager. On the other side, we see a board of investment directors with backgrounds in Law and Chartered Accounting.
The team is complemented with an advisory board that itself comprises two distinct groups: blockchain and crypto specialists on the one hand, and entrepreneurs on the other who have been onboarded for the most part in what looks like a move to expand the project’s network reach.
Whilst not relevant to the project’s potential success or otherwise, this is an ICO team that boasts two refreshing distinctions from the typical profile of a blockchain start-up – it is not dominated by engineers, and it not entirely male.
The leading social media platforms – Facebook, Twitter and Telegram – are generally used as barometers for the interest generated by a token sale. In the case of EQUI, its social media profile is modest, to say the least.
That may appear initially strange, given that this project can hardly be described as lacking attention in the mainstream media in light of the personalities that are driving it. But there appears to be one very good reason for that – the ICO’s pre-sale has an extremely high buy-in of $100,000.
It may be, then, that Barrowman’s team are not prioritising any need to draw in public interest. At the same time, the white-paper does not indicate what percentage – if any – of tokens have been allocated specifically to the main sale where there is a much lower buy-in at $100. It may be, then, that tokens will be sold out completely before the main sale is start to due on March 8th.
It is worth noting that 50% of unsold tokens are distributed to token purchasers on a pro-rata basis, with the other 50% being used to finance further project activities.
This is a solid project with a solid team which is enjoying a lot of attention from traditional media. However, the business model is ultimately nothing more than a tokenised form of a traditional venture capital business model,
In comparative terms, for an ICO we see little risk here from a credibility point-of-view, given Barrowman’s credentials and networks, ordinarily the key aspect to this project. But whilst the proposition to identify and mould new innovative technology start-ups into successful businesses may sound great on paper, it is not entirely clear that its tokenised model will appeal to its traditional constituency of investors.
Ratings Score Methodology: a weighted average across three scores: Concept (10% weight), Blockchain Fit (30% weight), Execution (60% weight).
Disclaimer: Please note that all ICO reviews on ICOExaminer are non-technical assessments, in some instances are sponsored, and are very often sentiment-based and should not - under any circumstances - be construed as professional investment advice.