What Start-ups Need to Know About ICOs – The Newest Way to Raise Funds
As the world shifts toward a cashless economy, ICOs (Initial Coin Offerings) have emerged as a brand-new financing model, especially for start-ups. An ICO is intended to help those with limited resources raise funds for their new project or idea by releasing their own cyptocurrency tokens. These tokens attract optimistic investors in the global blockchain community who fund these start-ups by purchasing the tokens.
Less than 1% of start-ups that opt for the traditional venture capital route actually receive funding. On the other hand, 90% of projects that are set to seed funds via ICOs reach their fundraising goals.
ICOs are gaining popularity among the start-up community, largely due to more rapid funding and fewer regulations. Also, the process of running an ICO is less rigid and daunting than crowdfunding via traditional avenues. Start-ups don’t have to prove their ideas in the marketplace to obtain funds. The process is very simple: create a website, pre-announce the token sale, publish the terms in a white paper, and tell the story and vision of the project. That’s enough for investors!
Planning an ICO for Your Start-up
Since an ICO is an open and unregulated system, investors often worry about the ambiguity of utility tokens and significant risks, such as taxable proceeds.
In order to popularize your token among crypto investors, you must prioritize the authenticity and transparency of your project. With many ICOs being established every day, you have to prove your legitimacy to your potential investors. You must clearly convey how your crypto token is expected to acquire more value as your project grows. Your ICO token needs transparent and identifiable goals and the ability to solve a particular problem.
To educate you more on ICOs, we decided to share a great resource for anyone looking into this revolutionary financing model. The infographic from BTXchange you’ll also find below shares the history and evolution of ICOs, the latest trends, the positives and negatives behind ICOs, and much more to help you decide if an ICO is the right avenue for you.
Infographic URL:
btxchange.io/ico-roundups-infographic/