ICO Analysis: Acorn Collective

 

Acorn Collective, commonly called just ‘Acorn’, is a crowdfunding platform with the mission to provide “free crowdfunding for any legal project in any county.”

Crowdfunding platforms like Kickstarter and GoFundMe have grown in popularity over the last 10 years but still exclude many projects looking for funding. As centralized entities, they restrict what projects can use their platform, charge significant fees, and often times omit developing countries.

Acorn follows a loose project approval criteria protocol to ensure that any project has the opportunity to receive the backing it’s looking for. As long as your project doesn’t break any laws, you’re good to go.

The company plans to build an entire crowdfunding ecosystem with several different supplementary revenue streams to keep the core platform (Acorn Hub) free, forever.

Featured Projects

As a project founder, you can pay to have your project featured to backers outside of your normal community. This includes features in mailing lists and social media mentions to backers who have opted-in.

Acorn promises that these features do not act against their main value of openness and will not monopolize backers from smaller projects.

Acorn Support Services

You can easily post your project to the Acorn platform for free, but it takes a lot more than that to successfully raise the appropriate amount of funds. Acorn offers a handful of services from pitch deck production to legal help to put you in the best position possible.

Although these services have a cost, they’ll ideally help projects raise more than they would have without them. From an ecosystem standpoint, it’s a win-win-win. Inexperienced projects get additional support, Acorn gets more revenue, and the platform gets better quality projects.

Operations Fund

The team is going to allocate a portion of the ICO raise to an Operations Fund. The fund will include several outside investments ranging from real estate to ICOs with the goal of 5-10% minimum annual returns.

These returns are used to cover internal costs and are not available to token holders.

Platform Data

The company also plans to sell their usage and transactional data. They assure us in their whitepaper, though, that it will be “within a rigorous framework of data protection and consumer preference.”

Project Incentive Fund

In order to encourage early adopters to use the platform, Acorn plans to include ample incentives. Early project founders will get perks like fund matching, initial investments, and startup funding in exchange for equity – all provided by Acorn.

Early project backers will receive OAK bonuses to use for funding and affiliate rewards.

Token

OAK is the main exchange currency in the Acorn ecosystem. Like many others, it’s an ERC20 token. You can use the token to:

  • Back projects
  • Purchase goods and services in the Acorn Marketplace
  • Make point-of-sale transactions with Acorn Local
  • Buy additional Acorn Support services

There will be a maximum fixed token supply of 90,000,000 OAK.

 

The OAK token pre-sale is currently in progress until February 19th. At this time, you’ll receive 1 OAK for each 0.7 USD that you contribute – a 50% discount on the main ICO offering. ICO contributions must be made in Ethereum.

The cap for the pre-sale is 7 million of which the company has raised a little under 2.5 million at the time of this writing.

The main ICO will occur in March and April of this year although the team hasn’t specified exact dates for this yet. 1 OAK will cost you 1.4 USD during this raise.

The team has set a minimum funding goal for the main ICO of 3.5 million OAK with a hard cap at 65 million.

Of the proposed 90,000,000 OAK tokens:

  • 80% will be distributed during the ICO
  • 16.66% are for the company and vest over 2-years
  • 3.33% are dedicated to the community and bounty rewards

The team has different budget plans depending on the amount of funds raised during the ICO. You can find the complete plans in the project’s whitepaper. Generally, though, the more money raised the greater the percentage that will be used for the funds and reserves rather than expenses and team rewards.

Team

Acorn was founded by Dr. Moritz Sebastian Kurtz and Peter-Andreas Kurtz in July 2017. The management team doesn’t have much experience in either crowdfunding platforms nor blockchain technology. Fortunately, though, their advisors include David Ives, the former CTO of Crowdcube, and Ian Scarffe, the founder of Binkplus.

The team also states that they already have a list of ventures waiting to list on the platform but don’t go into detail on who or what these projects are.

The Verdict

Acorn has a noble mission but seems to be confused on whether it wants to be an NPO or a for-profit company. They’re targeting a decent sized (>$35 billion) market that will continue to grow but are up against some solid opponents (Kickstarter and GoFundMe).

If their strategy of focusing on underserved projects works, Acorn could have a lucrative career. There are still a lot of unknowns to be answered, though. The revenue model, target customers, and platform have yet to be proven.

Risks

  • No product yet. The MVP platform won’t be available until Q2 or Q3 of 2018. Even though the team states they have ventures ready to use it, it’s unclear how legitimate they are and whether they’ll value what the team produces. (-4)
  • Inexperienced team. The founders don’t have crowdfunding or blockchain experience – the two things the platform revolves around. (-3)
  • Risky revenue model. A major part of their mid-term revenue strategy is in the Project Incentive Fund and Operations Fund. Banking on a 5%-10% annual return for the Operations Fund is foolish. The Project Incentive Fund is great to get those first users on the platform, but it’s not certain that they’ll stay once the incentives are gone. (-3)

Growth Potential

  • Good advisor support. The company has a large group of advisors with the skills to help fill the gaps of the management team. (+3)
  • Untapped market. Acorn is clearly targeting a market that’s vastly underserved. Using this strategy, they could enter the crowdfunding space without having to compete against the big guys. (+6)
  • Multiple revenue streams. The team seems to be utilizing a “shotgun approach” for their revenue. Testing out different strategies could work well in the beginning and allow them to focus on the most profitable ones as they grow. (+5)

Disposition

Acorn scores +4 out of 10. The platform brings a few novel ideas to the crowdfunding space but their good intentions could be their downfall. It’s rare that you see a company that doesn’t have profit as a primary motive succeed. I’m not saying that it’s not possible – just rare.

The project may have a better chance of success if they narrow in their focus in both their overall company mission and the revenue model they use to get there.

Investment Details

  • Token Type: Utility
  • Platform: Ethereum
  • Symbol: OAK
  • Pre-Sale: Jan. 29 – Feb. 19, 2018
  • Private Sale: Ongoing
  • Token Sale: March or April (date pending)
  • Price: 1 OAK = $1.40 U.S.
  • Payments Accepted: Ethereum
  • Jurisdictions Barred from Participating: China, United States

The Acorn pre-sale is in progress and will last until February 19th. You can participate here.

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