Blockchain & Cryptocurrency Glossary

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Private Sale

1 min read
Pronunciation
[pry-vit sayl]
Analogy
A private sale is like a startup’s seed funding round, where shares are sold to angel investors under negotiated terms.
Definition
An early fundraising round where tokens are sold to selected investors—often VCs or strategic partners—at discounted prices before public sale.
Key Points Intro
Private sales secure early capital via:
Key Points

Discounted price: Lower token price than public rounds.

Strategic partners: Investors provide expertise and network.

Lock‑ups: Tokens subject to vesting to prevent immediate resale.

Negotiated terms: Custom agreements on allocation and rights.

Example
A project sells 5% of its token supply to venture funds at $0.05 per token with a 12‑month vesting schedule.
Technical Deep Dive
Private sale uses SAFT or custom purchase agreements. Token issuance locked in vesting contracts. KYC/AML whitelisting performed off‑chain, with investor addresses added to on‑chain whitelist for later token claim.
Security Warning
Deep discounts can lead to large sell pressure at unlock; align vesting to long‑term milestones.
Caveat
Opaque private rounds can concentrate tokens with insiders; disclose terms for community trust.
Related Terms
SAFT
Vesting
Token Allocation

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