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Am I missing something with regards to the #ICO craze?
1. It is an unregulated mechanism to raise funds.
This seems to be the main #USP at the moment. As soon as regulations are implemented, I cannot see how it will remain a preferred mechanism for fundraising. All the functionality created by the blockchain for the purpose of an #ICO is already sufficiently available in current financial markets, just in different forms.
2. Where VC and PE investments are based on trust in the entrepreneur and the underlying business, it would seem like trust is completely outsourced to the blockchain now.
Does the mere use of the word blockchain, suddenly make the entire process and all it's moving parts trustworthy?
3. There is no "liquidation prefs" etc when raising funds through an ICO, but these are also added to a deal by choice in the case of VCs
There is a reason why VCs created these "checks and balances" in their agreements when investing. #RiskMitigation
So in my view, all the mechanisms that are used during an ICO are already available to investors and entrepreneurs. I therefore struggle to see the "disruptive" side of an ICO. In my view it is just another mouse trap...
If anyone can convince me otherwise, I am more than willing to learn.
Thanks
I've invested in a few. A couple went lower than or same as than ico price after release but a couple of them went waaaaayyy up and I made huge profits. we're talking 500%. And they never really dipped much after that. If you know how to find quality ico's that boom like that, it's worth it. The risk is worth it to me ;)
Thanks so much @eavaryan. Coming from a VC background, this is new territory to me and I am eager to learn. Have a great day.
Thankyou. For reference, you can research ico's and get an ico score. For ie, the next ico I am investing in is Red Pulse, which has a score of 95%. I think it may boom because it is built off the neo blockchain (popular), there is a lot of hype and talk around it, and they already have an existing business. Will it thrive in the future.. I don't know. But I can take profits right after rpx coins are released and buy back later if I want. What is VC?
This is extremely useful, thank you! "What is VC" - Venture Capital, whereby we invest in the equity of early stage companies. Similar to an ICO, but within the traditional Venture Capital framework.
Ah yes, should've known. you're welcome!
I believe there is a lot of red tape involved in other forms of fund raising. Red tape has good and bad features. The blockchain though has a unique possibility of opening up another form of organization. We have had sole proprietorships, businesses, cooperatives, clubs, and more. I would sort of guess that block chained decentralized organizations will fall under a company sub-heading -when economists write the history books in 30 years. But giving people equity in turn for working on and contributing to projects. -Like Steemit- has an enormous potential. Wikipedia, and Linux show are willing to contribute when they are able; but taking those motivations combined with a blockchain and cryptocurrency has some interesting and exciting publications.
Thank you! Would certainly be interesting to ready about this in 30 years. (-;