Cryptocurrency is changing the world as we know it, and one of most relevant ways is how startups are fundraising. Typically a startup would have a few options to get their company off the ground: bootstrapping using their own money, VC funding, or most recently crowdsourcing using tools like Kickstarter. Now, with the trend of cryptocurrency spiking, startups can get creative and raise money using this new form of payment.
There are quite a few platforms and companies that are now making it even easier for startups to fundraise using cryptocurrency.
“An ICO is a virtual coin or token that is sold to investors in an effort to raise capital for a new company.”
Depending on the terms of the ICO, the token sold to an investor can represent either an investment security, or a form of currency within a company’s application. And while it might sound a little too futuristic, ICOs are a key tool for launching a business or entrepreneurial effort.
Taizo Son, founder and CEO at VC firm Mistletoe, says initial coin offerings will be a major way to raise funds.
Regulators are scrutinizing the new red-hot fundraising trend in which start-ups and blockchain companies bring in millions of dollars by issuing virtual tokens to investors in exchange for money.
But one Japanese billionaire investor thinks that, with time, the so-called initial coin offerings (ICOs) will become one of the “greatest major methods” for start-ups to raise funds in the future.
Growing number of people recognize that one of the best ways to invest in cryptocurrency is by participating in Initial Coin Offerings, a.k.a. ICOs. However, one barrier that stops people from investing is unfamiliarity with the ICO process. At a glance, funding your favorite project though ICO might look complicated. However, once you get there, it will be a piece of cake. This article will show you to participate in ICO issued on Ethereum blockchain.
“The first step is setting up Ethereum ERC20 compatible wallet.”
“A Crowdfunding platform that provides the service of token creation and management would merge the best of two worlds.”
A Blockchain empowered Crowdfunding would leave the traditional Venture Capital approach with a very limited added value for the entrepreneurs mainly related to the know-how, experience and practical support that the firm can give to the entrepreneur.
There is a common myth that starting something is the hardest part. Starting is easy. Growing something is hard. Finishing something is the hardest.
Allow me to backtrack for a moment…CONGRATULATIONS ON YOUR SUCCESSFUL ICO!
Okay. I’m done.
Now the real work begins. You need users. You need people creating transactions on your platform. You need investors to keep buying coins. You need people to care when you publish something.
If your startup died, you need people to show up to the funeral.
Last week I attended the biggest Russian cryptocurrency and ICO forum in Skolkovo that hosted 1500 participants. During the Crypto Conference we had a chance to talk to experts and listen to numerous market participants in order to make our own conclusions. Yes, the main conclusion is in the header — ICO funding speed has slowed down. Startups need to keep their finger on the pulse to raise investments.
ICOs started as a way for technology that doesn’t have an underlying business model to raise funding. A perfect example of a technology like this is a protocol (like the Internet).
The ICO trend started to skyrocket in June, as early adopters took advantage of being the first movers. Ninety-three percent of their projects were funded, and for some of them, they managed to raise tens of millions based only on a basic business plan (known in the industry as a whitepaper).