Fund Raising through ICO may replace Venture Capitalists
Since the beginning of 2017, Blockchain ecosystem startups have raised the equivalent of $ 1.3 billion in the form of Initial Coin Offerings (ICO), half of which was in June and 64 ICOs have been completed and more than 300 are expected throughout the year. The trend is accelerating dramatically, with funds raised through ICOs in the year 2016 totaling $ 222 million, which was less than half of the $ 500 million invested through capital- risk.
We can see that startups specializing in Blockchain technology or cryptocurrencies are no longer the only ones to use the ICO for their fundraising. As a result, companies from sectors as diverse as cloud services, finance, gaming and betting are now embarking on this new form of participatory financing that began in 2013.
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At the corporate level, new fundraising records were broken at these ICOs: last June Bancor raised more than $ 150 million, and in July Tezos closed its ICO with one a new record of $ 232 million. But this amount will certainly be exceeded by the Block.One startup, whose participatory financing operation started on 26 June 2017 and will continue until 1 June 2018; To date, the company raised approximately $ 223 million by distributing 244 million coins, knowing that it aims to distribute a total of 900 million coins !! It is also striking to record the speed records beaten by this category of crowdfunding operations. On May 31, Brave, the web browser created by the co-founder of Mozilla, raised $ 35 million in 30 seconds.
The success of these ICOs with a community of investors is undeniable. However, with a few exceptions, startups seeking to raise money in this way present their project via a relatively brief website and / or a poorly detailed white paper, far from the audit and operational constraints imposed by the Venture capital investors. It is therefore necessary to consider a market which to this day is not subject to any regulation or control. In France, the law does not define the status of an ICO which does not fall under the financial law since it is an exchange of tokens against cryptocurrencies which are not themselves recognized as currencies . Being prudent Is therefore appropriate.
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