What Was the Acorn Collective?
The Acorn Collective was a cryptocurrency project founded by Moritz Kurtz and Peter-Andreas Kurtz in 2017. The project was active until March 2019, when it ceased operations. The founders intended to create the first blockchain crowdfunding platform.
- Acorn Collective was a crypto startup based in Bristol, England, active from 2017 to 2019.
- Its goal was to reduce the costs to companies and individuals seeking to crowdfund through a cryptocurrency-powered platform.
- The Collective collapsed with the broader crypto market in 2018 and early 2019 and never recovered.
Understanding Acorn Collective
The Acorn Collective was designed as a decentralized platform where individuals could raise funds or money from investors. Acorn was to connect investors with entrepreneurs who want to launch a new product or service. Oftentimes, new companies or startups look to the private sector to raise funds because they're usually too new or have little-to-no financial history.
As a result, startups usually can't get approved for credit or funding from traditional sources, such as banks. In exchange for donations, Acorn allowed those who invested to receive discounted products and services from the companies.
Acorn collective published a white paper in 2017, outlining how the blockchain-based crowdfunding platform would work. The white paper also outlined the objectives of the project, which included the following:
- Create a free crowdfunding platform that allowed nearly any legal project to be listed from almost any country in the world
- Democratize access to capital for funding, particularly for developing and emerging economies
- Create a crowdfunding hub and a secondary marketplace where goods and services that had been funded in the past could be sold
- Create the Acorn token (OAK) through an initial coin offering (ICO) to facilitate the transactions within the ecosystem, which was designed to connect the investors, founders, and consumers
The ICO was designed to generate funds to be used to fund the ecosystem and allow free crowdfunding.
The Idea Behind the Acorn Collective
Acorn Collective has a defunct website. However, in a video posted on Nov. 3, 2017—obtained via Youtube—Moritz Kurtz, the co-founder, and CEO of Acorn Collective, outlined their goals.
Mr. Kurtz said that the idea for the venture was inspired by the “lack of funding or amount of inappropriate funding” going to developing markets. Kurtz proposes that blockchain is the solution for problems that crowdfunding was supposed to solve but didn’t:
I think ICOs and digital currencies as a whole—the concept and the application of this technology—is a really, really great opportunity to change the model and the concept of crowdfunding back to where it was supposed to be.
The original Acorn Collective model was to promote crowdfunding projects without fees for crowdfunding project owners by means of the ERC-20 token, which would offer smaller transaction fees than those of other platforms and be funded by the transaction activity of the token holders.
Acorn Collective Gets Initial Funding
In order to get to the scale necessary to implement their plan, the Acorn Collective raised $400,000 in Series A funding in July of 2017. This money funded the startup until it launched a pre-sale of coins called OAK tokens in 2018 that netted $4,000,000. The maximum number of tokens available—seven million tokens—was sold at a 50% discount. The pre-sale lasted from Jan. 29 through Feb. 19, 2018.
Kurtz released a video on Feb. 23, 2018, to announce Acorn Collective had sold out its pre-sale of tokens. In the video, he acknowledged some technical problems but appeared confident the Collective was securely on its way to an ICO.
The Collective planned to have its public ICO in 2019, the proceeds from which would fund the project to avoid charging fees on the crowdfunding platform. The OAK token was designed to be used within the Acorn Marketplace to facilitate payments for goods and services. Also, funds from the ICO were to be used to create a point-of-sale payments app–or software application—to facilitate payments electronically.
Acorn Collective's Planned ICO
The Collective planned the ICO to sell 35 million OAK tokens, with the main ICO sale price set at $1.40 per 1 OAK. Management had planned a total public sale of 72 million OAK for the ICO with a total maximum supply of 90 million OAK.
The distribution of tokens was to be allocated as follows: 80% for the public ICO sale, 16.66% to the company itself, and 3.33% to "bounty and community rewards." OAK tokens were proof-of-stake only, and the Collective promised no new OAK would be generated at a later time.
By mid-2018, the Acorn team released the designated token growth and stability mechanisms and other technology necessary for the business. In a video released on Nov. 16, 2018, Ed Lobbett, the Chief Operating Officer at Acorn Collective, announced that the team had discovered that creating a crowdfunding platform was more difficult than just creating a token and system of exchange.
The Collapse of ICOs and Acorn Collective
Although the Collective had invested in some highly polished marketing videos, the complexity of setting up a business that didn’t clearly mesh with the mechanics of cryptocurrency on top of a collapse of the ICO market spelled the end for Acorn Collective.
In a Medium piece published on Mar. 18, 2019, the co-founders (who did not sign their names to the article) told the public, “The main-sale did not go well. We expended a great deal of time and resources into making our main-sale a success; unfortunately, the crypto market crashed.” These events led to the collapse of the company.
The founders also discovered they were financially tied to a money-losing venture:
Almost immediately, two-thirds of our team had to be laid off with the rest taking significant pay cuts; focused solely on delivering the platform as promised. We, as co-founders, injected more of our own capital to ensure we delivered the platform.