A Little Background
With all of the negative stories surrounding Initial Coin Offerings (ICOs) at the moment, it is wonderful to see that there are some real positives out there.
As we all know, life has changed a lot in recent years especially when it comes to raising funds needed for new businesses and small start ups. One of the latest crazes is crowdfunding however ICOs are not far behind if not already a step ahead.
ICOs Versus Others
Although there are some terrible statistics being released, including confirmation that of all of the ICOs in 2017, 46% failed or were a scam, there is still a lot to be said for ICOs. It is worth remembering that only 36% of the Kickstarter concepts actually made it to the end of their lifespan in the same timeframe. So bearing that in mind, ICOs are already ahead.
Furthermore, you can look at the average capital actually raised. Kickstarter averaged $25 thousand in comparison to the ICO average of $250 thousand which is quite clearly a massive difference. Another noteworthy point is the simple fact that Cryptocurrencies and Blockchain are still very much in the early stages of their development so there is a lot more still to come with ICOs. Projects are continually learning on how to improve their White Papers and their offerings. And although there are still concerns by investors over whether to invest or not in ICOs at the moment, bad press reports are mainly to blame for this worry. However, with the mass investments in Blockchain continuing there is still a lot of interest in the digital economy and latest technology.
With capital raising, there have been several complaints with crowdfunding which are frustrating for many. For example if your target is not reached then the money you have raised is usually returned to the investors. You also need to make sure that your project is patented or copyrighted before you begin crowdfunding. Just to be safe.
In contrast, you are a lot more in control if you use the ICO process. The whole system is now becoming tougher to enter if you are trying to make an easy buck and scam investors. There are also many other benefits with ICOs including: The White Papers required for ICOs are all extremely detailed and well researched pieces of information which cannot be accomplished in one day. This highlights the amount of work needed to enter into before raising an ICO; ICOs very much focus on the teams behind the project so an investor is well aware of the experience behind the project; ICOs are a lot more formal than crowdfunding pages.
And In Summary
At the end of the day, if you are seriously looking for investment into your idea and want a strong backing from investors then the only way to go is with an ICO – as an alternative to the move traditional modes of financing. Crowdfunding is for the more informal fundraising for college or charities and not so much for the capital required to start up a new concept. The way forward is ICOs that is for sure.