Private Sale Definition
A Private Sale is a method of offering a product or service, such as a business’ shares, or in the context of cryptocurrency, tokens or coins, privately to a select group of individuals or institutions before they are available to the public. These private sales often occur before an initial public offering (IPO) or initial coin offering (ICO).
Private Sale Key Points
- A Private Sale is an exclusive event where selected participants can purchase a company’s tokens before they are available to the general public.
- Selected participants are often the company’s own community members or partners, but may also include high net worth individuals or institutional investors.
- The participants are usually given substantial discounts or value-added incentives to participate in the Private Sale.
What is a Private Sale?
A Private Sale is a stage of fundraising that can precede an ICO or IPO. It involves the allocation and selling of a cryptocurrency’s tokens or shares to a specific group of individuals or entities. The goal of a Private Sale is to generate initial capital for the project whilst also building a foundation of stakeholders who can influence the future direction and success of the project.
Who are the participants of a Private Sale?
The participants in a Private Sale are typically early supporters of the project or high net-worth individuals. These individuals are often given first access to a project’s tokens or shares in return for their initial investment and belief in the project. This group of investors usually consist of venture capitalists, angel investors, or institutional investors, who get the privilege of purchasing tokens at a significantly discounted rate.
Where does a Private Sale happen?
Private Sales usually take place online, on a platform provided by the organization introducing the token. Private Sale events can be hosted on various platforms, including the project’s website or through a separate portal provided by the company. Emails, social media channels, and blockchain community forums are also common outlets where information about the sale is disseminated.
When does a Private Sale take place?
Private Sales typically occur before an ICO or public sale. The scheduling of these events is at the discretion of the organization and can depend on their particular fundraising strategy or objectives. They are often initiated once the project has matured beyond the concept stage and when there is a solid base of core supporters.
How does a Private Sale work?
During a Private Sale, the company sets a specific window of time when individuals or institutions can purchase the tokens. The tokens are usually offered at a discounted rate to incentivize early investment. Once the tokens have been purchased, they are distributed to the investors’ digital wallets. The company uses the capital raised from the Private Sale to further develop the project or to prepare for the public sale.
Why do companies opt for a Private Sale?
Companies often opt for a Private Sale for a variety of reasons. They give the organization an opportunity to generate initial capital for the project while also building a foundation of stakeholders who can influence the project’s future direction and success. These sales also allow the company to test the market’s response to their product before presenting it to the general public.
