Why an ICO is the best crowdfunding imaginable
Who knows what the future holds? In a few decades, perhaps some new technology will completely transform the way we raise the money we need to fund our creative impulses and great ideas. But right now, we’ve got Initial Coin Offerings, ICOs, and they’re at the cutting edge of crowdfunding techniques.
Why is that? What sets ICOs apart from crowdfunding platforms like GoFundMe or Patreon? Why are ICOs gaining so much steam and why is it they are able to raise so much money so quickly compared to Venture Capitalist financing? Let’s find out:
Incentive
One of the real keys to the success of the ICO model is an incentive. As we’ll see, even Venture Capitalists have some additional incentive to invest in ICOs, but especially if your goal is to launch a crowdfunding campaign, an ICO is a way to go. Rather than asking private individuals to essentially donate money to a product, they would like to see succeed, ICOs offer them something of value in exchange for their contributions.
The introduction of cryptocurrencies has essentially allowed private individuals to become investors themselves — holding mini-stakes in a token and a company they believe will succeed. They can either cash in on success later by exchanging the token for more than they bought it for or they can spend coins within their own ecosystem, giving holders access to the corresponding product and/or service. Of course, many may also choose to buy tokens simply to support a venture they believe in. But the addition of a monetary incentive raises the stakes and contributes to the large amounts raised in record time by ICOs.
What’s more, company founders of ICOs are incentivized to go around relying on Venture Capitalists because ICOs leave them in control of most of the company’s equity. And even Venture Capitalists should be investing in ICOs, since their money doesn’t end up tied up for as long and new exchanges are emerging every day that allow for more efficient trading in cryptocurrencies.
Community
Another huge advantage ICOs have over traditional funding methods — crowdfunding or otherwise — is the creation of a strong community around a product or brand. Money raised through other forms of crowdfunding can be seen as a kind of charity that doesn’t form any lasting ties with a customer base. A successful GoFundMe campaign may not result in very good sales and raising money through venture capitalists doesn’t connect a brand with any consumers at all!
ICOs make use of this stage of development to meet multiple needs. On one hand, they raise sufficient funds to finance their growth and on the other, they form a firm, lasting connection with a strong user base that has a stake in the success of the company and its token.
How we can help
Of course, this community doesn’t appear out of anywhere. The creation of this strong established base and the success of the ICO depends on reaching out to the right people with a smart marketing initiative. Emissary Guild can help with that. In fact, we specialize in helping new ICOs spread the word and build an effective community — a community that’s ready to invest in a token and a great new idea.
