Balanc3 Aims to Make ICO Spending More Transparent
Blockchain startup Balanc3 has developed accounting software to help startups demonstrate to investors that they are using their ICO funds responsibly.
Increasing ICO Transparency
Although initial coin offerings (ICOs) have been around since 2013, the Ethereum platform has made the innovative fundraising model more accessible for startups who do not want the responsibility of maintaining their own blockchain. ICO fundraising has soared in 2017, and according to data obtained from CoinSchedule, year-to-date ICO contributions are set to surpass $3 billion — with an astounding $800 million raised in September alone.
Because so many startups are holding ICOs, it can be difficult for investors to decide which ICOs to participate in; moreover, the explosion of this fundraising model has left many investors fearful that they will fall subject to fraud. Indeed, the U.S. Securities and Exchange Commission (SEC) recently filed a complaint against one token sale organizer for defrauding investors by failing to fulfill his company’s promise to invest ICO contributions in real estate.
Blockchain startup Balanc3 believes investors and token sale organizers alike will benefit from increased financial transparency. Increased financial transparency will give investors confidence that a startup is directing its funds toward the development of the company’s project– not to frivolous expenses or excessive advisor payouts. Quality startups, meanwhile, will likely attract more funds if they demonstrate to investors that they will use that capital wisely.