What is: Crypto Private Sale

What is: Crypto Private Sale ?

Crypto private sales are a critical stage of funding for many innovative projects that focus on receiving money from large institutional investors, high-net-worth individuals, VCs, and strategic partners who are interested in getting involved in a project development at an early stage. For retail investors, crypto private sales serve as a source of insights regarding a project’s progress, as well as recognition by industry experts and overall potential.

Do not overlook crypto private sales. Despite being unable to participate directly, it is crucial to stay informed about upcoming private sales to always stay ahead of what's coming into the market in the near future.

What Is a Token Private Sale?

A crypto private sale is a funding round with the main goal of acquiring an influx of money  from a limited investor base, including accelerators, incubators, venture capital funds, high- net-woth individuals etc. Usually, the terms of the coin lock (aka vesting schedule) of this round are more strict to private investors. Since the end of a Private Sale round, there is not much time left before the project goes to market (TGE). Usually, it takes less than one year.

During a private round, a project must already have a finalized and clear tokenomics, decent marketing exposure and a well-thought-out plan for a public token distribution. All the funds raised through a private sale are usually utilized to finance further public sales, especially marketing activity and product development. 

How to participate in a private token sale?

Both seed and private sales are funding rounds that are typically reserved for an exclusive group of investors who have an ability to provide a fundamental strategic assistance, such as  networking, tokenomics & market making advisory, and listing support, and contribute a significant portion of money to a project they believe in. The investments required for private sales are often substantial, making them inaccessible to an average retail investor. Instead you have a chance to become one of a few initial token holders by participating in public sales, such as ICOs, IDOs, and IEOs, and sometimes Pre-sale. Unlike private sales, these public token sale events are accessible to a wider range of transparent and do not typically require significant funding.

How to Find Private Sale In Crypto?

Finding upcoming private token sales can’t be easy because they aren’t available for a wide range of investors. However, following the activity of sophisticated investors, participating in crypto conferences, attending relevant events, and following projects that have passed their seed funding rounds can provide valuable insights into upcoming or ongoing private token sales. In addition, it would not hurt to join a few crypto investing-related communities and follow the industry updates, as prominent media outlets and blogs often cover the hottest private token sales. Or, you can just turn to CoinLaunch, a platform that finds and evaluates all private sales and compiles a comprehensive list accompanied by in-depth reviews and ratings.

Are private sales in crypto safe?

Like any other fundraising round, private sales carry risks that shouldn’t be overlooked. First things first, private sales in crypto are conducted in a less regulated environment compared to public sales, which carries more risks for potential investors. Secondly, private token sales require a much bigger amount of investment than public sales and at the same time are riskier because the fate of the project is still unpredictable.

What is the meaning of crowdfunding in crypto?

If you are familiar with a traditional crowdfunding process, it’ll be easy to understand it as the cryptocurrency space operates in a similar manner. In the context of cryptocurrency, crowdfunding refers to a process of acquiring funds by selling tokens to multiple investors or the crowd. Project developers issue tokens that will be distributed between many investors including investment funds, venture capitalists and regular retail investors during one (or a few) token sale events called, ICO, IDO, IEO,STO etc. All the funds that were raised during various stages of crowdfunding are used to finance token development, marketing activities, and other operational activities.

Unlike traditional crowdfunding, crypto crowdfunding is decentralized and involves the ownership of tokens by investors. Token investors can easily sell their acquired cryptocurrencies upon listing on crypto exchanges or hold them to benefit from potential price growth. Acquiring ownership of tokens in crypto crowdfunding is a faster process compared to receiving shares or equities through traditional crowdfunding methods.

How many funding rounds exist in the crypto market?

Essentially, all the crypto fundraising rounds can be classified into two main groups: private and public rounds.

1. Private Rounds. Cryptocurrency private sales are targeted specifically at large and established crypto investors and institutions. During the private sale stage, projects strive to build smart strategic partnerships “marriages” with and acquire a substantial amount of funding from angel investors, venture capital funds, influencers and other investment funds.
2. Public Rounds (ICO, IEO, IDO, etc.). Once a project receives a significant monetary flow from investment funds and large investors, it starts raising funds from retail investors. During public rounds, developers spend more effort on promoting a token for a wider base of potential investors that also want to participate in a token sale event alongside large investment institutions. 

What is a crypto crowdfunding platform?

A cryptocurrency crowdfunding platform helps entrepreneurs raise funds for the development and promotion of their cryptocurrency-related initiatives and products. On crypto crowdfunding sites, any user who meets certain criteria can invest in an emerging cryptocurrency in exchange for a share of tokens that they can buy at the lowest price. Cryptocurrency crowdfunding platforms take different forms depending on which token sale events they host and how they help projects raise money. There are IDO launchpads, ICO launchpads and IEO launchpads that also can be classified into crypto incubators, accelerators and round hosting platforms, depending on the level of support they provide.

How to invest in crowdfunding crypto projects?

• To invest in crowdfunding cryptocurrency startups, start by researching a project and a platform(s) hosting its sale.
• Next, choose a crowdfunding platform through which you’re gonna buy tokens, and fund your account with the required cryptocurrency or fiat currency.
• Invest in the token sale by purchasing a project's tokens, following the platform's instructions and keeping track of your investment.