Topic: What are advantages of ICO crowdfunding? (Read 1086 times)

Well, ICO projects have several advantages: you can raise a lot of money, you don't have shareholders, it's often faster than a regular funding

To collect a lot of investors and being able to give something in return without giving away shares, or am I seeing this wrong?

You could easily fund your ambitious project systematically if you managed to impress investors through existing marketing channels.

Recently projects with just a rough idea and strong backers could easily funded themselves millions worth of BTC/ETH, i had seen some projects with unrealistic roadmaps and objectives and yet had their ICO succeed, hence arguably ICO crowdfunding is the best way for entrepreneurs to kick-start their dreams.

The range of advantages extends even more if you look at smart contracts, but its irrelevant to discuss here.

An ICO is an initial coin offering. A coin is a token which represents some value (promised or real. ICOs take place before a project is launched, the funds collected are used to build the product specified in the white paper.

An ICO is generally launched at much earlier stages that an IPO (Initial public offering). IPOs tend to be accessible to only high net worth investors and those within certain networks and connections. On the other hand,  ICOs are open to anybody as long as it is legal for them to participate according to the laws they have to abide by.

At times an ICO is also called an ITO (Initial Token offering)

Most ICOs have one or several white papers, that describe a business process, a new currency with added benefits or a token which gives access to certain functionally. An ICO allows investors to acquire these tokens in exchange of other cryptocurrencies usually Bitcoin or Ethereum

ICO’s are open for a period of time, during which investors can buy the new token, in most ICOs early investors are given bonuses

I tought to myself: Could there be any disadvantages of ICO crowdfunding for the new business? Some disadvantages already listed here, but I didn't spot anyone mentioning the old money.

I mean, if you have really, really good idea for a business and that business is not entirely crypto-related, there are many investors out there who are willing to invest in that but only in $/€/£. They may have, let's say millions of dollars to invest but are used to look at new ideas very carefully from dollar point of view. Some (many?) of them may not be willing to change huge amounts of money to cryptocurrency just to invest even if they might if the new idea would be presented to them as dollar based investment.

After all, I don't know if this is a major issue.

There are pro's and con's.

If you consider that the objective is to provide access to funding for startup's and to enable savers to invest in those startup's for profit and to support startup's then the following are some of the advantages and disadvantages.

Pro's
> Any serious startup can create a pitch, present it and hopefully generate funding.
> Startups don't have to work through templates from crowd funding companies or meet their individual requirements around history and capital and reporting and pitch materials like videos etc.
> Anyone with spare money can invest in any startup they choose. Pre-crowd funding investments were more for the elite in society, crowd funding made investments in startups accessible to everyone, ICO's are the next level making it possible for anyone to conduct their own due-diligence and invest.
> The money raised goes straight to the business raising the money, there's no one sat in the middle gving it a haircut
> It's global so anyone can invest from anywhere which is why ICO's raise such large amounts compared to country level crowd funding projects.

Con's
> Because investors have to conduct their own due-diligence it attracts a lot of scammy ICO's.
> ICO's are often run on a no-promise donation basis by which I mean they ask for money but don't promise to deliver anything.
> Scammy ICO's never mention regulation even though ICO's are becoming increasingly regulated.
> ICO's are often for research projects with no clear commercial aim so where's the profit really coming from? I'm all for supporting research but as an investor it's important that there's a commercial aim such as a profit generating product being developed to run on top of the new blockchain
> ICO's are often for a hand-full of smart contracts to run on Ethereum or a tweaked branch of Bitcoin. Ask yourself, is a few weeks work tweaking a Bitcoin branch or writing a few smart contract really worth tens of millions of dollars? Perhaps, if there's a strong commercial case for the results.


ICO's are a great way to invest and raise investment but I'd suggest always consider people who are involved in the ICO and the commercial aims of the project. If this is someone's 5th ICO then how serious are they about this ICO? I prefer new ICO's by companies with a commercial story to tell, some background history leading up the ICO project and a commercial aim.

For full disclosure I am involved in an ICO which we're putting so much effort into with regulators and legal advice to protect both investors and the business, something that so many ICO's totally ignore.

they can collect some funds to make the project works into market capitalization..buyers also can save more and receive bonuses during the crowdfunding.. it is advantage to both

Crowdsale is very useful to shorten project time, if using standard funds then the process will become more complex, many startup projects are assisted with ICO sales, ideas and system prototype faster realized. The more projects will make the crypto rhythm appear more balanced.

First, it is the fundraiser for any project. It is essential, because it helps us to measure the success of a project. Based on the amount of money they collect, we can see the real potential of it. And the value of a coin also depends on it.

You don't have to give away equity, at the same time you need to make sure you have a utility token and not a security, so be careful.

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It allows projects to fund themselves without traditional VCs, so they can don't have the same limitations. So they can focus on some goal other then just pure greed. Look at the Ethereum foundation, they use the money to pay for open source projects and documentation to help the community. They don't have to worry about optimizing squeezing users, like a traditional company would

ICO is a great way to do a crowdfunding, because you usually don't need all your funds during the first weeks of your project. I mean, if you have a budget, you will spread it on the whole project time, obviously.
What is great with ICOs, is that it's mostly bitcoins and ethereum funds. Theses cryptos have a very decent value, and they might very well go up in value even further. Thing is: if ethereum doubles in prices in 6 month, and that the company planned to spend 1/12th of their funds each month ? Well, do the maths: beggining of the month, you have X. End of the month: 11X/12. However, that 11X/12 had a 2^(1/6) increase (in other words, over 12.2% per month). You see, each month, you spend 1/12th of your funds, or 8.4% approx... And each month, your eth gains 12% in fiat value.

So, unlike a conventionnal IPO, an ICO can literally give you an infinite source of funds, as long as crypto-market stays healthy and with such a drive in price.

Worst-case scenario, crypto value stays the same (or even drops a bit), but hey, you still have millions in fundings, so who the hell cares. It's free money.

So, to sum this up, ICO > IPO because free money > not-free money.  can't argue with that logic, uh? :p

Crowdfunding is the way where projects can obtained a large funding without spending their own money. For project to become big, it needs large funding because the cost for development and listing it on exchanges is not a joke.

Now that the one of the purpose of crowdfunding is to gather money, many scam ICOs are being created to take advantage of it. Easy money as it is that's why always be careful when investing on ICO. There are some factors to considered before investing so better research on it first.

thee best advancement is gonna be the funding part if you ask me. Funding is always good when it comes to investments.

The advantage number one and reason why everybody are making ICOs now, is that you don't need to take a loan in a bank to realize it. That is the reason why banks have so negative position to crypto-currencies.
Other advantage that you don't need to run for money searching, you just create the site of your ICO and those people who see your project as perspective invest in it themselves.
The creator may have all those money in the process of investment, but not scam ICO will must to work on all of investors and to give them at least double profit. But creator just can't stay without a profit, so I'm agree about scammy nature of ICOs.

when chinese baned ICO's. The value of the tokens is lower

Correct me if I'm Wrong, Advantages of ICO is That They Make A Project That Can Help Investor Double Their Money.
For Example, ICO For New Wallets and For A New Coin, Then After A Month The Price of The Coin Should Be Doubled, To Be Successful.
If, The ICO Project Succeed Then All The Investor Get Their Money back to Double or Triple.

The only one who wins a lot of money are the founder of the project, because they fill their pockets with thousands of dollars, and maybe millions if they makeup their project and their whitepaper well.
If you find a good ico, then you can make a good profit if their project goes well, but it is risky to invest in icos right now, most of them are scam.

Let's start with the advantage of ICO(crowdfunding) the few people that are benefiting with this type of activity are it's developers or whomever are supporting the project together with the team for their plans. Also for the investors, in exchange for their money / investment - they'll get token / coin and it's up to them if they'll hold it or dump. But mostly what's happening is the disadvantage of it, their project aren't really good in the long run and they are letting it out of it's phase.


They are better in a way that you can just sit at your home and add some funds for them but I don't really think it's a better one than those usual crowd funding projects.

Believe me, if anyone wants to scam, they won't stop after reading your post. I think this man has to get knowledge about this and not only this man, everyone, but usually people in scam ICO's are very experienced, not beginners. Just look developers of some scammer icos.
It will be awesome if he has great idea but lack of knowledge sucks.
In ICO you usually spend collected money in promoting and etc.