Topic: I need a reality check, is an ICO right for me to fund a business? (Read 958 times)

SO instead of the current business model, I want to give the business to the people who invest in it to operate. The only profit is given back to the business operations, paying employees, and expanding the business to more communities. Imagine you give $10 to a fund that is raising $1m, but we only use half of that $1m, so $500k to operate the business, and the other half is rightfully the investors making this happen. So out of the gate your $10 a month or your one time $10 is cut in half, but as soon as the company reaches $2m that initial $10 is now paid back, and when it's $4m, it's now $20 and so on and so on. Im trying to be creative in incentivizing people to fund programs that help heal communities. Make sense?

The nature of your business determines if you can raise fund in ICO. And you talk of owning a part of the business base on sum invested. That make your fundraising an STO. I just wonder how you will satisfy your investors in ICO when your business is a blockchain based.

That's donation, you are not looking for ICO you are looking for donation. Just because you call it ICO doesn't mean that people will profit from it, you are going to use all of that money for helping the poor people which is a very noble gesture and I hope one day you can do it, but that doesn't mean that you can convince investors for something like this.

Maybe you can get a small amount, people do like to donate to charities and if you can actually provide proof that you are helping people with the money you get, there is a 100% chance you can get some donations. However what you get will be donations, it is not ICO, it is not crypto, it is totally unrelated donation and that's it, the only thing that this has in common with us is that you may accept bitcoin donations and that's it.

True, even the most potential project nowadays do even hardly able to get some funding just because there is already some less interest
on investors side.This is the reality now thats why its really hard to raise up some fundings into this kind of situation and as said, we
are on a pandemic situation where people wont prioritize investment as of this moment but rather be focusing into their own
needs and priorities for them to survive.

OP is having a different thought with that. If you have to back read, you will understand why I'm explaining it like that.

There's no profit in this kind of business.

I must agree that that the timing now is bad for ICO. We already lost so much investors through the years due to scams and unwanted fails of most speculated projects back then, even Libra of facebook didn't show up. Investors now are losing confidence to invest on projects lately, there have been a huge decrease of investors if you would look at the raised funds of projects lately, unlike back then. Especially now that we are facing a world catastrophe, we are getting less support if we plan a project now. The best thing to do now for profit earning is trading and futures trading.

You have a good idea or something like Amal. but the problem is that investors are not currently very interested in the ICO project for several reasons, especially fraud. because ICO's reputation is bad, it makes most investors worry about investing in it. but it also doesn't hurt if you plan to develop a project through ICO, because that is your own right.

If your business model is a charity organizational, u don't think you need to tokenized such project because the target audience are not cryptocurrency savvy. People you want to offer a meal per day do not have any knowledge of blockchain technology. You can raise funds to kick start the business.

I think OP has work around on this "free meal".  As stated earlier, this can be a form of promo, wherein every x purchase of foods a y number of a free meal is allocated.  It not that hard to maintain this while profiting from a business.  Though I agree that if their token is classified as security then it will need legal documents to proceeds.


This may answer the question stated by OP.


It seems that it would be a speculative asset since the investors need or wait for the token to increase in price for them to get a profit and that is not attractive since it is actually a common scenario. 

I see where you're coming from but I struggle to see why would any investor be interested in funding this project since there'll be no profit generated. Their financial contribution would simply be one based on them willing to do a good deed but then even that would be temporary rather than long term. In my opinion, you need to think of giving something back to these investors, something they see as value.

I think you're at the wrong time to implement that project funded by an ICO. because we all know that the ICO's nowadays are not working well anymore so even your goal is good(charitable) I might say that your chances to succeed in raising funds using the ICO method is very slim. I might suggest that you should find an alternative way to fund your startup business (if its a business). but not the ICO method because it's already dead.

The idea looks good to me, that is looking for a way to end the hunger problems in America, but however there is a big roadblock and that is the fundraising method you are choosing, which is the ICO. ICO method of fundraising is long gone into oblivion thus no one is saying anything about it and even if any project comes up with, there will likely be no chances of success which is as a result of the known fraudulent nature of ICOs. Nowadays, people prefers IEO because the project team can't outrightly scam them unlike in ICO. Therefore my own suggestion is, if you really trust in your project or idea, get a team if possible, work on the idea to be more better, perfect it and seek for IEO on good exchanges.

If you are providing free meals then how is it a business? Also as far as I know you can only do ICO with regulated investors in America. Since your token isn't providing any utility to holders, it might as well be classified as security and you might have difficult time going around it.

If there is no product! Assume that it will fail. Many traders and investors are already learned in ICO. Today, we are already educated and if we see that it has no products then it is red flag.

That's why, OP should not just think that it is to fund his project. Besides, you must have brilliant core members because it also serves as reference for investors to fund your project.

It'sd hard to set up project projects via ICO that is nontech, people would like to see a tech-based project, even teach based project are having a hard time to succeed, and to give you an update, it's hard to get investors to invest in ICO, they are fed upon it, you need an extraordinary project and create a big hype to get the support of investors and the whole community.

How will you even get to convince people to invest with you for a charity work and hold a token that doesn't have a worth? It's not the right thing to do. The real cryptocurency is still struggling with getting people to understand how it works and invest. This food charity can be done without a token introduction.

This part I still can't understand. Your business, as you called, is actually charity as people donate to your food bank/food truck right? How you keep 'contributions and business running' when you're relying on donation and from that, partial ownership in the business to investors for shares of your business is enough to convince them of profit? Are you going to steal a part of the donation to keep as your profit?

for now, it is very difficult to ensure a very good ICO. even very few percentages can be trusted about ICO. Well, in 2020, I don't know ICO that gets a big profit. only a few IEO are like that, but for ICO, I'm still waiting for its success this year, even though it's quite difficult.

Also you should keep in mind that the token should be of use somewhere in your business and won't be just a holding for the investors, think of ethereum network where all the ICO were hosted you could have invested in any ICO all you needed was an ethereum wallet. So think about your business and how can others benefit by purchasing those tokens from you, if you come up with a sound idea then there will be a lot of sound pockets willing to invest in your business Idea and even better there are Pre ICO investors also who offer generous money.

Ico have already lost the trust of investors long time ago, all the disappointment investors have had to experience in investing in all this project already erased the trust they had, this is why ico's are struggling lately, even you are not helping with your plan either, it seems your token holders will not benefit much from this your plan.

Be careful with your decisions, I've seen a lot of businesses taking advantage of this market to find investors. And after they accomplished their goal, the price of the tokens quickly fell to the ground and no one used it.

If you want to fund your business with ICO, it's better to prepare a clear project scheme or product that is convincing and promising. I think for now it's better to make a private sale or an IEO on an exchange. almost 100% of projects that run ICO fail for now, because it is no longer the ICO era for several reasons. what the investor sees first is definitely "product" and then reviewing the project, whether it can be profitable or not. before thinking about crowdfunding, you should develop ideas related to your project first.

That all depends on the project or business you are founding. People will invest on a ICO if it's something they know that it will earn them money. But for a fund raiser? i don't think so. But if it's a business with something with return for the investment like fore say 50% off for every $500 invested in the ICO. which can attract investors especially if the business isn't crypto-related.

what I fond find difficult to understand here is.. " what will be the use of the token" ?? there must be some use case for this token..  is the food been giving out for charity purpose? or is this business oriented .. if the token doesn't have a use case.. then it's just another shitcoin that will die in a short period of time..

I think it is not a charity, He has stated his business plan, and those free foods is probably some marketing promotion such as for every x number of orders, y number of food will be available to feed those who are in need of food.  His plan is somehow sound since the food business is quite a good choice.  It is one of the daily needs of people and with proper marketing and management, there is a huge possibility of success.


Actually tokens in a blockchain is a good way of determining the share of a person.  You just need to look at the blockchain and you can see the addresses that owns the token and it is quite easy to distribute profits to the holder.

You have to understand what blockchain is. It's not like a share that you can distribute to your investors base on what you have said. It's where bitcoin and any other coin runs. It's the network for most cryptocurrencies so it's not like an asset or dividend that you can give to those people that's longing to invest or buy a share with what you're trying to discuss here. As I have said, as long as there is no business model and profitable service or product you'll going to offer, it's more of a charity.

The return they get will be in half of their total investment, or the value of the company, maybe a coin isn't it but I think block chain can work somehow. I guess I have to do the math before I raise any funds obviously, but I'm just trying to imagine a community program funded by the people that have partial ownership in that company. If it takes 100,000 people to raise a $1m, and it takes $500,000 to hire employees and run the company say, the other half of the valuation of company belongs to the 'donaters' the reasons I'm calling them investors is because there is a possibility of a return even it's not the most lucrative investment. But if 200,000 people contributing monthly are now valuing the company at $2m then the early adopters have made their initial investment back, and as more people subscribe the more the company can thrive in communities and the more wealth early adopters can accumulate. I guess I have to find out what other incentives the 'donator' gets other then a peace of mind of feeding the hungry and shares in the company, I'm thinking of some type of product mailed to them could be more of an incentive. I guess I'm imagining it like a program you opt into as if it were some type of tax, and at the end of each year you can get some type of 'tax return' even if its not your total investment. I feel like there's something here, I just have to work out the economics of it,  because if it is a non-profit the $10 a month subscription (or any donation) would be a write off to the contributor.

1 in 7 people in America go hungry everyday.

It's not a business if it's non-profit. And you shouldn't call people that contributes money as investors, they should be donators. Because both words have a different meaning and being called as an investor, there's an expectation of a return of something from what they've invested in.
No investor will invest when the distribution of free meals to people once done, it's already done. I think that you have to clarify that to your donators instead of calling them investors.

It'd be less of an investment to gain wealth than it would be an investment in the belief that no one should go hungry. Like subscribing to Netflix for $10 a month gives you content, subscribing to the food service gives you peace of mind and ownership of the company providing the meals. It'd be in the interest of the investor to talk about the service with others so that more people contribute thus increasing the value of the company. It's a long shot.

I don't understand how you intend making money from your business because you clearly stated you want to be giving food to poor people free ones in a day. When you source for partnership from investors and issue them a token, how do you intend getting profit from your business ? Or when the initial token you issued to get money for the food business is distributed completely and you are done with the previous money invested, you are going to raise another fund. From experience about project startup you are going to end up with a project that is not sustainable and will latter result into shit tokens that will be massively get dump in exchange and later get delisted

ICO is not the right initial offering to raise funds for new project is either you do IEO or STO which investors trust these days. However, i think base the project only on food makes sense because the current pandemic will soon or later lead to food shortage but if you're planning run it as a crypto related project will need to add more feature which will make crypto community to have interest in the project, it will even give your project more utility/support.
In the meantime, you'll also need legal advice in terms of the SEC etc rules and regulations since you're from the US.

1. You call it "business", but it actually sounds more like charity, so which is it?

2. Your token has no utility, it's a share in your hypothetical company, but it's unclear how would it generate profit for investors? And what are the guarantees that it will be distributed?

3. Your token will be an unregulated security, which will attract the attention of the SEC.

4. No one is going to give 1mil to some anonymous guy's ICO these days.

5. There's no hunger problem in America, no one starves to death, the existing solutions work just fine.

Big companies joined ICOs mainly because it was a smart way how to legitimate your money when we look back into history, we realize that most of the money comes from money laundering.

ICO had lost its attraction among this forum members after uncountable scammy projects. So, ICO may not be a right thing for anyone who are even honest with dreaming about real business with innovative concepts. The chances for an ICO to reach its hard target of funds to be raised could be less than 33%, I mean you may get disappointed if you plan for ICO instead of focusing on developing your project to a least level with available funds.

ICO may be a right choice for the people who may expect reserve funds for their project development. Because, they may reach their roadmap even without funds to be raised out of ICO. Or, you may need to work in a way to gain faith among this community and then you may get your ICO plans may get succeed.

so how investors will be benefited with your ideas if your business Wil only give foods for free?
Its mean they can only get the  ROI they want base on the market value which you don't even know if the project that you will be created will have a value in the future , or it will  the demand you are assuming to have.

The business that you are going to set up is not new and you are going to fail because you did not gave us an explanation on how the investors can get his investment and how the community can benefit from your project, if this is only a charity project, then do it as a charity works with no investment involve, investors are investing in a working platform, products or services.

I suppose I'm relying on good faith of the investors to continue to contribute money into a business that feeds people for free, the more investors that are attracted to the idea the larger the market cap grows thus improving their ROI long term. Which is different then giving it away to a charity and never seeing a return at all. It is all cash out, the only cash in is the investors contributions and donations here and there. It'd be set up like a non-profit, but as soon as the money stops flowing, the business is done. 

You do not have any business with ico at all.
To fund a business, the first source of income should be your capital, followed by funds from private investors, then followed by crowdfunding processes.

You need to have a good project to stand a chance to earn funds through crowdfunding.

You need an actual product, an actual thing that already in work to impress and convince investors to launch a successful ICO. If not, you won't able to meet your ICO's goal. Many ICO first come out as very straight forward but because they lack anything works and all just concept, work-in-progress so they fail and ICO becomes a place that only scammers tries to run their pathenic (((ICO))).

I think better forget your project if you will raise via ICO. That's the reality check here! Or if you really want to pursue your project, tap private investors instead of running an ICO.  What you presented here is very weak and seems that you are not ready to handle the business. No clarity is given as to what particular business you want to venture with.

So in the investors will only own tokens and not directly a part of your company, which is a big difference. Therefore you must add good value to your token, cause otherwise, it  would be useless to invest in the token than directly in your company.

Not a good way you are the only one who will benefit from it once you start your business . You never mention how's your plan to add value of the tokens they are investing you don't even say how will you manage to give back to investors the interest they should have trusting you with the money.


Having a tokens as share is not enough since there is no real use of that tokens so its not worth it to exchange their money.  then you as project owner will have your own business  while investors will only have shitty  tokens.

I think you wanna say its a charity project where the goal is simply to collect money right? The objective fund is not possible if you can secure and make sure that you are really doing a project that beneficial to those who are in need. But this is not easy you know, cause no one will be interested on a charity case project that they will not get any benefits at all. Think about it, you will raise fund right? How do you think investors will invest on that if they can get some profits out if it. Its not that because its charity type but you should consider also how the platform will work for them too.

True! Most of the traders nowadays don't believe in any ICO projects since there were too many scammed one in the past. Furthermore, by launching ICO but there is nothing you can provide to attract investors, you will not receive a lot of investment! His recommend above are more relevant for your situation!

Most ICO investors today prefer a technology related startups that can operate online to make the world a better place wireless, trustless and most importantly decentralized I dont think they will trust to put a huge money to an idea like yours, what if you did not manage it well and went bankrupt? I recommend a bank loan or a venture capitalist in your area to fund your business if you really determined to do this then you can do it. 

ICO is not a good choice for your project but if you have something tangible to be seen by investors maybe some investors will support your project in running an ICO

I am not sure if ICO is the right one for you or not because the era of ICO almost ends or even it's ending. I think you can explain your plan to your investor, but in this situations, that won't be easy to gain trust from the investor because they will think that the project will not work well like before. Maybe you need to run your project first and continue with step by step of your plan, so your investor will see that your project is serious with the idea, and you want to make the project success in the long term.

I don't think so. You can't make money with charity unless you're just doing it with that intention. He mentioned startup so basically, there's a business that actually lies with his question and description. Whether he do charity or not, there's always a cost to develop his own coin because most projects hire developers that will create their token through their chosen chain. I hope that op will answer it and show his business idea if it's not a charity type.

I think he meant to do a charity.
I'd not recommend charity to use ICO as a fundraiser as they have their own costs involved and there's about no use of coins and no use of offering the coins. That sort of charity should come up as a charity that may also take crypto donations. If available, you could also provide your info and ask for donation in Gofundme, which is a better platform to get charity.

You didn't mention how you're going to do business with your startup. It looks not even a business at all if you're feeding people one meal a day, this looks more of a charity and investors that will put money into your startup will get ownership and how they'll make money from that? there's no clear business model that you're actually doing including the marketing and hiring of employees. Most of things that you have mentioned were all cash-out flow and the only cash in flow is the investors money.

that depends on what kind of business mechanism that you have taken it for your company.

In ICO what we are looking for is a product and this is the main thing for a company to raise the funds. Investors need a utility to be used by them for something else or generate profit to give the investors the dividend like what already given by some major platforms. They will not invest in something that will waste their time and money.

It's better for you to understand what's the ico https://www.investopedia.com/news/what-ico/

Hi I don't know where else to turn to get comments on the idea I have for a local business using an ICO to fundraise. My question is this, please bare with me..

Can you raise money with a token to fund start up costs on something that's a community project? Or a non-coin/tech related improvement?
The idea I have is to set up a collectively funded food bank/food truck that can provide one free meal a day to anyone in the city who needs it (trying to eliminate the hunger problem here in America), to keep contributions and business running, I incentivize the investors/philanthropists by giving them a partial ownership in the business via a token.

Now, let's say I offer 50% of the Marketcap of the token to the investors collectively, the more you buy the more ownership you have, and the more business we can continue to do. But with the remaining 50% I use to fund the businesses expenses, hiring employees, marketing, food, etc.
Well before I feel like I'm on to something I need someone to give me a reality check, because in my mind (based on my limited knowledge) offering tokens as say 'shares' of the company can be later cashed in as the companies Marketcap continues to expand, or as more people donate/invest.
My reality needs to be checked and that's why I'm asking you. Because if I raise say $1m to start up and use $500k to operate the business for the year and leave the $500k as the investors stake in the company does that create a problem for me as the company continues to grow? OR is that incentive of buying the token, funding food and service for hungry people, and being a partial owner with potential future profit on the right track to funding lots of future community ran programs? Is block chain even necessary?

Help me figure this out, and please give me ideas or solutions to problems I might run into. OR help point in the direction I need. OR tell me it's nuts won't ever work, be honest.