Paragon’s Cannabis Themed Initial Coin Offering
Table of contents
We’ve been seeing a lot of ads lately about initial coin offerings or ICOs. In fact, while you’re reading this article you may see some ads on our site about ICO offerings. We don’t control what ads you see, Google does, but if people click those ads we get some dollars which we use to feed our team of MBAs. When it comes to ads for ICOs though, we think you shouldn’t click them, especially ones that look like this:
That ad is for Paragon Coin, yet another ICO offering to debut. When you look at investing in a company or ICO, you should always look at the pedigree of the company’s leadership. You may not recognize this former model outside of her normal attire, but her name is Jessica VerSteeg and her past acting experience includes a TV series called “Single Ladies” and “The Amazing Race”, both of which were natural progressions towards becoming the CEO of a tech company. Like many tech prodigies without a higher education, this former Miss Iowa model supermodel already has a startup she founded which is a “Luxe Marijuana Subscription” that targets females. For $140 a month, AuBox will send you Kush Cake Pops and Cannabis Bath Bombs, though it all seems to be “coming soon”. They’ll even get your dog high:
In order to shore up the advisory side of Paragon, she decided to call upon Jayceon Terrell Taylor. He must have liked The Game with Michael Douglas as much as we did because he decided to start calling himself “The Game“. Straight out of Compton, Jayceon cut his teeth in the school of hard knocks selling drugs and mixing with Bloods. Even with the odds stacked heavily against him, he managed to turn his life around and became a notable rapper, record producer, and actor.
While he still runs into occasional problems like battery, sexual assault, and being shot at, he’s probably the only rapper out there setting a great example for impressionable young youth everywhere by inspiring them to get into technology with his newly assumed advisory role at Paragon.
Paragon’s Cannabis Themed Initial Coin Offering
Like most ICOs, Paragon is nothing more than a website and a “white paper”. Sure, the paper spells out an interesting plan. A WeWork type office space called “ParagonSpace” allows budding entrepreneurs to get together and build new cannabis ventures. Growers use the system to track plants using RFID which are then tracked through the entire supply chain from when they are harvested and sent for lab testing to when they land on the counters of cannabis dispensaries in every state where marijuana has been legalized. It all starts with a plan to purchase their first ParagonSpace location in Oakland around February of next year.
It’s a decently put together 44-page document. We figure it would take 2-3 MBAs a good week to put this together and it would probably cost between $10-20 thousand to produce. That’s all you’re buying here. In case there is never any active or liquid market for these tokens in the future, your money goes up in smoke – some of it, probably literally. This is the first risk highlighted in the Paragon white paper and the one you should be most concerned with. Even if there is a market for Paragon tokens, nothing guarantees that they will trade at this completely arbitrary valuation that’s made up out of thin air. Speaking of which, let’s look at the gamification that’s been embedded into this offering.
Paragon has created a total pool of 200 million bitcoins and is selling half of them based on the below presale terms:
This sort of “early bird gets the worm” approach does absolutely nothing for investors. If you were willing to sell shares at a 25% discount, are you trying to say that in 10 days the value of these tokens increased 13%? Not only is the initial “valuation” completely arbitrary, but this infomercial-like share discount scheme makes matters even worse. We’re seeing it across all kinds of these ICOs that are popping up like weeds and it is nothing but a publicity tactic. Then, we get to the actual sale of these tokens:
The initial token price will be set at $1 when it goes on sale on September 15. During the first 5 hours of the Token Crowdsale we will offer an early bird 5% discount, price will remain at $1 for the remaining of the first 24 hours and will increase $0.05 each 24 hours for 30 days or until all tokens sold.
This whole “price increasing every X hours” is a gimmick that makes people think that their investment is increasing in value when it’s presently worth about as much as a bag of dried parsley you bought on the street thinking it was skunk. At the end of the sale, the price of these tokens will be $2.50 to purchase. This implies that you should be able to sell what you bought in the first 24 hours at $2.50 but that is completely false. The ICO tokens you bought at a “discount” are worthless unless you can find someone to pay you for them. Remember what we mentioned before about how there may never be a market for these to trade on? Then there’s the bigger question that all ICOs can’t seem to answer. Who is holding this team accountable to make sure they actually do what they say they plan to do?
We’re not sure what people are thinking when they sink their money into these things, but perhaps this “review of Paragon” can shed some light on the naive thought process going on here:
While we’ve warned investors before about the dangers of investing in ICOs, and even more so about the dangers of investing in marijuana stocks, this may be the single worst “investment opportunity” we’ve ever come across combining the regulatory risk of cannabis investing with the complete uncertainty surrounding ICOs. If those reasons listed above are the most compelling selling points for this venture, then the person who wrote that review has no business investing in it – yet for some reason he did. An excerpt from an article on Cryptocoin News spells things out a bit differently:
While they failed to mention the pretty decent white paper that Paragon has put together, that feeling is still mutual. Perhaps the most incredible thing we learned when researching this article is that there are people out there who will actually take their money and hand it over to ventures like this one in hopes that somewhere down the line they’re going to be rewarded. Why would you ever take such a risk when there are so many other good investment opportunities out there with legitimate companies?
Conclusion
Sure, bitcoin keeps breaking new highs and many people have made lots of money by speculating on cryptocurrencies. That money has largely been made in bitcoin and other major cryptocurrencies, not the other 100s of “coins” that are now being minted left and right like this one. In short, the entire ICO space has become an unregulated isht show. When you buy these ICO coins, you give Paragon your hard earned money in hopes that they will give you more than what you invested at a future date. Go ahead and speculate all you want, but it is our opinion that you would have to be a complete and utter fool to invest one red penny in this thing. On the other hand, high risks can lead to high rewards and black swans do happen. As The Game says “Take me away from the hood, like the state penitentiary, take me away from the hood in a Casket or a Bentley”.
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1. “if people click those ads we get some dollars which we use to feed our team of MBAs. When it comes to ads for ICOs though, we think you shouldn’t click them, especially ones that look like this”
RESPONSE: Why would you advise your readers not to click on something to learn more? That is like telling someone here is a book about Japan, but don’t open it, just take our word for it that Japan is not a real place. It is not something to say to people in 2017, we are in a time where knowledge is power and the more you read the more you learn.
2. “you should always look at the pedigree of the company’s leadership. You may not recognize this former model outside of her normal attire, but her name is Jessica VerSteeg and her past acting experience includes a TV series called “Single Ladies” and “The Amazing Race”, both of which were natural progressions towards becoming the CEO of a tech company.
RESPONSE: Wow, thanks for just assuming all models or TV personalities are dumb and have nothing to offer. I mean, aside from being a model and TV personality, I am just a girl, what do girls know about being a CEO, or tech, or blockchain, or crypto, or ICO’s? I guess you don’t forgot about Karlie Kloss or Jessica Alba, or even guys that are in the entertainment industry but have done great things in business or tech like Dr. Dre or Ashton Kutcher?
3. “Like many tech prodigies without a higher education, this former Miss Iowa model supermodel already has a startup she founded which is a “Luxe Marijuana Subscription” that targets females. For $140 a month, AuBox will send you Kush Cake Pops and Cannabis Bath Bombs, though it all seems to be “coming soon”. They’ll even get your dog high”
RESPONSE: So a few points here 1. “without a higher education” I dropped out of college because I started modeling and traveling with my career, out of state tuition was hard to justify with my grades were being dropped down only because I was in Africa shooting for a magazine or New York for a fashion show and even though I was passing every exam and doing extra credit my professors were forced to drop me a letter grade for every 2 days of class I missed, regardless of how well I performed academically. I guess in your eyes because I did not finish college I am not smart, because I spent many years living in different parts of the world experiencing different cultures, volunteering at homes and shelters that makes me not fit for what I am doing now? 2. ” “Luxe Marijuana Subscription” that targets females.” Maybe like my white paper you did not read everything on The AuBox website? It is not targeting females, it is for anyone and everyone that would like a box and has a medical marijuana card. 3. “They’ll even get your dog high”, well, it is clear you knowledge on cannabis is very small and I am not judging you for that because I was once in your shoes of ignorance, so FYI all dog products are CBD.
4. “In order to shore up the advisory side of Paragon, she decided to call upon Jayceon Terrell Taylor.”
RESPONCE: Yes, I did call Jayson. I called him because cannabis has been in his life since he was a child and when you are around something for so long you learn everything about it. He also co-owns a dispensary and a cannabis line, his knowledge of cannabis has been very informative and as you even said, “he’s probably the only rapper out there setting a great example for impressionable young youth everywhere by inspiring them to get into technology with his newly assumed advisory role at Paragon.”
The Game likes to share things that he is passionate about and believes in. For example, his workout routines, his tastes in pop culture, and his knowledge of the positive effects of legal cannabis, and now blockchain. If this reaches even half of his following and gets them to read about blockchain, about crypto currency, and about helping the cannabis space become transparent, then that alone is life changing. Like I said earlier knowledge is power and there are many people in America that might get left begin because no one bothered to tell them where the future is going. The Games knowledge and outreach to educate others is HUGE for us as a society.
5. “It’s a decently put together 44-page document. We figure it would take 2-3 MBAs a good week to put this together and it would probably cost between $10-20 thousand to produce. That’s all you’re buying here. “
RESPONSE: The document was developed internally by the Paragon team. It is a compressive business plan that shows the amount of research and dedication that went into starting Paragon. Moreover, the team has many years of combined successful experience in the tech space.
6. “In case there is never any active or liquid market for these tokens in the future, your money goes up in smoke – some of it, probably literally. This is the first risk highlighted in the Paragon white paper and the one you should be most concerned with. Even if there is a market for Paragon tokens, nothing guarantees that they will trade at this completely arbitrary valuation that’s made up out of thin air. Speaking of which, let’s look at the gamification that’s been embedded into this offering.”
RESPONSE: It would be completely irresponsible to guarantee a return or a liquid market for a utility token, i.e. an instrument that is not a security. In fact, unlike many other token sales (aka ICOs) that prey on the inexperienced by promising “guaranteed returns” and employed high power sales tactics, Paragon shows its maturity by working with numerous law firms and creating documents/terms that represent best industry standards.
7. “This sort of “early bird gets the worm” approach does absolutely nothing for investors. If you were willing to sell shares at a 25% discount, are you trying to say that in 10 days the value of these tokens increased 13%? Not only is the initial “valuation” completely arbitrary, but this infomercial-like share discount scheme makes matters even worse. We’re seeing it across all kinds of these ICOs that are popping up like weeds and it is nothing but a publicity tactic. Then, we get to the actual sale of these tokens”
RESPONSE: We are giving them a percentage off for being part of this project early on. Moreover, you (author) assume various speculative scenarios simply to negatively comment on Paragon tokens. The approach is intended to reward early adapters and is routinely employed across many tech sectors. It is not unique to token sales.
8. “This whole “price increasing every X hours” is a gimmick that makes people think that their investment is increasing in value when it’s presently worth about as much as a bag of dried parsley you bought on the street thinking it was skunk. At the end of the sale, the price of these tokens will be $2.50 to purchase. This implies that you should be able to sell what you bought in the first 24 hours at $2.50 but that is completely false. The ICO tokens you bought at a “discount” are worthless unless you can find someone to pay you for them. Remember what we mentioned before about how there may never be a market for these to trade on? Then there’s the bigger question that all ICOs can’t seem to answer. Who is holding this team accountable to make sure they actually do what they say they plan to do?”
RESPONSE: The real value of the token is not in the ability to speculate with it. In fact, we are trying to prevent that with the overall design of our internal economics and token terms. The real value of the token is in the potential suite of products/services that come with it once the Paragon business model is fully deployed.
9. “While we’ve warned investors before about the dangers of investing in ICOs, and even more so about the dangers of investing in marijuana stocks, this may be the single worst “investment opportunity” we’ve ever come across combining the regulatory risk of cannabis investing with the complete uncertainty surrounding ICOs.”
RESPONSE: This article may be the single worst write up I’ve ever come across.
10. “yet for some reason he did. An excerpt from an article on Cryptocoin News spells things out a bit differently:”
RESPONSE: That article was written before we announced what we were doing, so naturally anyone can assume anything. Tip of the day – you should always check the date an article was written. It was written before Paragon publicly unveiled its website and white paper. That shows rushing to conclusions and poor fact checking on your (author’s) part.
11. “there are people out there who will actually take their money and hand it over to ventures like this one in hopes that somewhere down the line they’re going to be rewarded. Why would you ever take such a risk when there are so many other good investment opportunities out there with legitimate companies?”
RESPONSE: Maybe some are buying PRG because they know it will go up in value, but most are believers in the cannabis space and want to see this space treated like a real industry.
12. “While we don’t have any meaningful amounts of money in bitcoin at the moment, we’d be more likely to invest by holding the actual bitcoin. As we said before, we are slowly accumulating bitcoins on Coinbase and logging in to a one-stop-shop couldn’t be easier.”
RESPONSE: This is just laughable. Now I know why this article was riddled with inconsistencies and had zero fact checking done. Written by a novice.
13. “If you click this link and put $100 in Coinbase, they’ll give you $10 in free bitcoins (immediate +10% return) and we’ll get $10 in free bitcoins to help feed our MBAs.”
RESPONSE: Lol look at you, now it all adds up, you are the one that just wants to profit from a referral fee to coinbase!
Hi Jessica,
Thank you for taking the time to reply in such detail. Sincerely, it is really great that you are open to having a dialog on what we’ve written here. The author will address each point below.
1. As you pointed out, telling someone not to click is a sure way to get them to click. Rest assured, everyone is clicking it now (I linked that to your homepage).
2. Let’s not make this a gender thing please because it’s not. Not only is it extremely difficult to do what you do (because everyone wants to and the competition is so tough for one) but it’s even more difficult to then pivot into the world of tech investing. Dr. Dre, Ashton Kutcher, Jay Z, these are all exceptions and also people who pivoted later in their careers.
3. People that do complete higher education should realize that it doesn’t actually make you smart, it just trains you how to behave and play well with others. It’s clear that you’ve been quite successful at a young age and that takes intelligence (especially noting the aforementioned competition). However, some of that rigorous training comes in very handy when it’s time to be CEO.
Here’s what vogue says about your venture AuBox:
http://www.vogue.com/article/medical-marijuana-cannabis-subscription-service
Jessica VerSteeg, model, former Miss Iowa, and one-time competitor on the Amazing Race, founded the company in an effort to cater to the female cannabis consumer.
That’s where we came up with the whole “targeting females” thing. As for your comment on my knowledge of dogs and cannabis to be lacking, you are correct. I only have experience hot boxing my cat.
4. It’s great that The Game is able to influence such a large following of people and he has lots of experience with cannabis.
5. Noted
6. Comparing an ICO to scam “guaranteed return” investments doesn’t place it much higher on the spectrum of things people who have never invested before (likely lots of those who will participate based on what we have seen) should be investing in.
7. It’s the time frames I have a problem with here. Like the fact that when it goes on sale you discount it for 5 hours only.
8. This is a good point you raise. However, as you say it is only viable “when the business model is fully deployed”. With one out of every 10 VC-backed startups failing, that’s a pretty big “if”. Getting some VCs on your side would do a lot to instill some confidence here on your ability to deliver.
9. Noted
10. This gentleman’s reasons for investing were still atrocious and a bad example for newbie investors
11. You cannot talk about things “going up in value” unless you had a proper valuation to start with. That’s maybe the worst thing about these ICOs. There is no notion of valuation whatsoever.
12. Not sure what this implies. if I had $1 million in bitcoins I wouldn’t be a novice then? While it’s true that people having skin in the game changes their perspective, it doesn’t seem too relevant here.
13. We hope you availed yourself of our free gift!
Thank you for your comments Jessica and we hope this works out for you and all the investors that have signed on for the ride!