why did they decided to go with a traditional VC funding route as opposed to launching their own token...
Because VC firms investing in startups with the potential getting very high returns have a much more established track record than ICO’s. There is also better chance of the startups raising funds through VC ending up getting the money for which they are looking oppose to ICO’s since there is so many of them. With ICO all you need is a cryptocurrency wallet. This means anyone from anywhere across the world can create its own ICO. Most ICO’s require very minimal investment for begin with, as little as single token and their misuse has ended in many scams and projects that have already failed. Also ICO’s sales are mostly unregulated, generating an air of uncertainty for potential investors. Investors know this, and will likely think of any firm that has secured VC funding as having met a certain standard. In other words VC is more secure for traditional investors.
Very much agree. Too much regulatory uncertainty with ICOs. If a firm can get VC money it’s undoubtedly preferable.
Also, with VCs as partners the founders get strategic advice and professional networks which are helpful when it comes to scaling.
Another interesting piece of info I read today:
"... growth investors like venture capitalists typically require a higher rate of return to compensate them for the risk. According to CB Insights, only 0.91 percent of startups make it from seed stage to greater than $1 billion in value.
Thus, seed valuations need to be less than $10 million ($1 billion multiplied by 1 percent) and returns need to be higher than 100x for the bet to be expected value positive at that failure rate (100x multiplied by .$01 = 1x money). (This is a slight oversimplification but helpful for purposes of this analysis).
The bottom line is that the initial valuation matters and needs to compensate you for the risk."
With that said, ICOs are extremely favorable to companies and founders. VC funding is much stricter and gets closer to reasonable valuations.
source: https://www.coindesk.com/making-sense-crypto-asset-valuation-insanity/