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    Oct. 16, 2018, 3:30 p.m.
    Business Models

    Civil’s token sale has failed. Now what? Refunds, for one thing — and then another sale

    “For those who purchased tokens, first of all, thank you. We’ll offer full refunds.”

    It was clear — definitely by midnight last night, but — that journalism blockchain platform Civil’s initial coin offering, in which it aimed to raise $8 million, was not going to work. Civil ended up raising about $1.4 million, and was acquired by ConsenSys, .

    Some of the things that went wrong are clear. It was very hard to buy into Civil, though in the last couple of weeks the company had started letting people buy tokens with cash and was also, up to the last minute, to email Civil customer service for help buying tokens.

    “The biggest things to know are that a) we’re going to try this again in the near future, under more reasonable terms; and b) this doesn’t impact the grant funding for any of Civil’s initial, ‘First Fleet’ newsrooms, which will continue publishing per the terms of their respective agreements,” Civil cofounder told me in an email.

    In a , Civil CEO said that “a new, much simpler token sale is in the works. We’ll be sharing details on that soon,” and noted that nearly 3,000 people had bought Civil (the hard way!) in this offering. Those buyers can either “opt into this new sale, request an immediate refund, or be automatically refunded by October 29.”

    The “” that got seed funding from Civil will keep running for now — and they’re getting a fresh $3.5 million from ConsenSys (beyond ) to do it. (Four other newsrooms had also , and Forbes had .) That $3.5 million will come with the relaunched token sale, Coolidge said (the Medium post notes the sale will happen within “weeks, not months”). Coolidge told me:

    It reflects Consensys’ commitment purchasing $3.5M of CVL tokens at whatever price the reworked token sale determines. They’ve also committed to either a) not voting those tokens or b) working with the Foundation to ensure that the tokens are voted in a manner that does not represent the outsized ownership by ConsenSys as we bootstrap the system.

    They recognize it will give them a large share in the network, and have no interest to gut the market dynamics by being able to exercise outsized voting power at the expense of others. We’ll be sharing more specifics on this front soon.

    I was confused by this (is it valuable valuable cash that the news orgs are getting? Or is it Civil tokens?) Coolidge explained:

    Consensys is going to buy $3.5 million worth of CVL tokens when we launch our new sale in the coming weeks, and at the new terms we set (eg, they’re not getting a discount on the price they pay for CVL relative to any other buyers).

    They’re paying now for those tokens, with that money being committed to the Civil Foundation so that it can get up and running officially, and on the same timeframe Vivian and her team had projected based on the end of the the first attempted token sale.

    POSTED     Oct. 16, 2018, 3:30 p.m.
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