[This article was written by Tempson True.]
ICOs (initial coin offerings) haven’t always been popular and up until only a few years ago, traditional fundraising methods—such as bank loans or entering into partnerships—were considered the norm. However, despite security concerns and a lack of trust in recent years, ICOs are fast becoming the preferred mode of raising funds for small (and indeed medium and large) business owners.
The ‘old-school’ methods of processing financial transactions and investing can bring high charges and interest rates, which can be highly demotivating for the ordinary investor. Moreover, if you pitch an idea in front of an organization or a bank for funding, they are likely to request a stake in your business.
In order to overcome these issues, and give business owners absolute autonomy over the running of their business, ICOs are an excellent alternative consideration, and some will argue that they should be the first source of fundraising. Why? Well, the business owner rewards investors with cryptocurrency and both parties enjoy a win-win situation. The business owner is able to raise funding to run his venture and the investors wait for the value of the cryptocurrency to rise — much like what used to be the traditional way of capital investment, only a more modern approach.
Let’s have a look at some of the businesses that have benefitted from an ICO, to give you a better idea as to whether you should consider one, or not …
This venture raised more than $8.5 million in one month. It is a decentralized cryptocurrency exchange, running on the NEO network, and allows users to trade different tokens (primarily between participants of the network, but you can also trade on other blockchains).
In July 2018, they rolled out an update to the exchange, enabling users to confirm their trade without any delay, with the help of a matching engine. The mobile interface is quite clean and easy to use, so even new users won’t have any problems.
Moreover, if you want to integrate their wallet with your business, just use the API and you’re good to go. The funds will be directed straight to your Switcheo Network wallet, where you could trade them for any of the listed token pairs.
This venture is due to launch next year; their ICO was conducted in NEO as well as Ether. This was a huge undertaking and they managed to raise approximately $12 million, which is a sizeable sum for initiating a Blockchain-based startup.
The idea behind this venture is that it cuts down the need for having a middleman in your everyday trade dealings and particularly aims to benefit the content creators and service providers. One of the coolest things is that, even before the launch, using an ICO has allowed them to partner with niche-specific giants including Digi, Discovery Channel, and Maxis.
Bridge runs on a native token, which is used to reward its investors for a $13 million initial investment.
The main target of Bridge is to provide feasibility for KYC (know your customer). It implies that all decentralized platforms will be linked so that once a user has provided personal details on one platform, their details will be shared on all Blockchain networks, meaning that there is no need to repeat the process. Basically, data is stored on Bridge’s Blockchain and individual businesses do not have to store user information, thus reducing operational costs for them and increasing efficiency and portability in the industry.
Their ICO was conducted in March 2018 and within 35 seconds, all of the tokens allotted for crowd sale were sold, resulting in them raising approximately $20 million.
The company is an insurance startup, providing security and scalability to individuals and organizations alike. The venture has a 2-layered protocol, adding more to the security needs of its customer base.
One of their core aims is to offer a marketplace for Dapps in the insurance industry.
This company tops our list in terms of fundraising as the venture managed to raise about $90 million in their ICO. Put simply, Status eases your access to Ethereum by offering clean and easy-to-use interfaces for smartphone apps.
The apps have multiple functionalities and you could use them for buying or selling Ether with other token pairs, surf an array of futuristic Dapps with the help of an embedded browser, and, of course, instead of selling Ether in an open market, you could find someone near your location and sell in person, while recording the details on the blockchain.
One of the most attractive features is that the app comes with a messenger function where you could chat with friends on the network and conclude your trade deals in an utterly secure environment.
It is pretty evident that ICOs have the potential to transform the procedure and scale at which fundraising is conducted. All these ventures prove that, due to a sheer level of trust, transparency, and efficiency, ICOs allow a business to raise more money from a distributed investor base, rather than relying on a single investor.
Tempson True is COO and PM at ICOHolder.com and has an extensive background in internet marketing and product management, managing over 50 web products. He holds a Masters in Management, and a Bachelor’s degree in Visual Communication.