Bridging the gap between ICO risk and investor expectations

The ICO sphere is seen as a magical land where a whitepaper, the word ‘blockchain’ and some high tech jargon can help teams raise millions of dollars for their projects. But the avarice and wanton abandon of late 2017 is long gone.

The ICO market is a strange place. Seen as a punchline to the very people who’s jobs are threatened by it (see The Financial Times ‘ICOmedy’ coverage), many outsiders believe it’s a place where the potential of mere pipe dreams create value from thin air – somewhere that any fresh faced twenty-something with a head full of ideas and a computer science degree can become a millionaire overnight with a subreddit and a ‘.io’ domain.

Those halcyon days of yore are seemingly behind us.

Q2 2018 has seen a dramatic fall in fundraising. Obviously, we can link this to the bear market that has destroyed the feel good factor that consumed the crypto-market for 2017, creating value that was further invested into Initial Coin Offerings, as people attempted to find the next 10,000% return from the new tokens being issued hourly.

But the good times of new found value backing the next big idea couldn’t last forever, and when the market collapsed from January 2018 onwards, the funding for ICOs began to dry up.

So, how will this market survive? By adding new participants with fresh funds to back ideas. Investors from outside the crypto-market are needed to bring investable assets to the best ideas.

So why aren’t they coming?

Traditional investors expect to see a certain level of information, commitment and planning from project teams. They’re not getting this at the moment.

There is a massive gap between what investors are looking for and what ICO project teams are capable of showing them. Every investor deck that I have read through in the last couple of years has been lacking any information that would attract a traditional investor. Business plans are as rare as hen’s teeth in the ICO market, projections for revenue per user even rarer still.

But why would you produce this as an ICO team? The traditional format for ICO fundraising is a whitepaper, a one pager and an investor pitch deck, all seemingly explaining the same idea in different ways. So why pander to traditional techniques for capital raises?

Because it’s the only game in town.

The majority of 2017's ICO backers are ‘ICO’d out’. Their capital is locked in projects that haven’t launched their products or have disappeared completely (the rate of project failure is running at 85–95% for 2017 ICOs, depending on which news sources you check). So, ICOs for the second half of 2018 and beyond need to court those who have yet to get involved in cryptocurrencies and ICOs.

So, how do Block Venture Project propose to to bridge the gap between ICOs and traditional investors?

• We will assess projects and only work with those who have the potential to become a fully functional and profitable organisation. We will also provide an audit to projects who don’t meet our criteria so they can improve their offering.
• We will help potentially brilliant ICO projects become ‘investor ready’, through consulting with the core team and helping to create a whitepaper, pitch deck, business plan and revenue projections that are fit for purpose.
• Once a project is ready, we will bring investors and ICO teams together for pitching and Q&A sessions so that projects have the best chance possible of raising capital from sources who can fund their project development and marketing to create a viable and sustainable business.
• We will maintain an advisory presence within the project to help manage the various stages of development and make sure that investors are getting value for money and the core team are producing as promised in their roadmap.

This will make sure that projects with potential can thrive. Access to consultancy to make a project viable twinned with access to investors to fund the idea will help to smooth out the differences between what investors want and what ICO projects are offering at the moment.

If your ICO needs help raising funds, visit us at www.blockventureproject.com or start a dialogue via contact@blockventureproject.com