Blockchain and the Road to ICO
By Jorge “Jojy” Azurin
If there was one basic lesson gleaned from Founder Institute-Manila’s latest event entitled “The Road to ICO: Crazy, Rich Blockchain”, it is that blockchain and initial coin offerings (ICOs) can be mutually exclusive. After all, as one of the event’s highly crypto-informed audience had pointed out, one need not undertake an ICO to be on the blockchain.
Joining me in the panel of speakers last 19 November 2018 were Magellan Fetalino III, whose company had just completed an ICO project this year, and Christian Blanquera, founder of two startups acquired by Sterling Group of Companies in 2017. Christian is also the technology committee lead of the Philippine Association for Digital Commerce and Decentralized Industry.
Founder Institute-Manila’s directors Allan Tan (CEO/President of Ideyatech) and Dale Dennis David (Founder of MyCURE) facilitated the discussion.
Perhaps because of the profile of the attendees — a motley of cryptocurrency enthusiasts, start-up founders, IT developers and students — the discussions effortlessly deep-dived into the state of the blockchain technology in the Philippines, the role and attitude of regulatory bodies toward innovations, and types of tokens and their purposes, among others.
Use Case for Blockchain
Acudeen Technologies, Inc., a graduate company of Founder Institute-Manila, has one of the successful ICO launches in Southeast Asia. Identified by International Data Corporation (IDC) as one of the top 10 fastest growing fintech companies in the Philippines, Acudeen reportedly completed a $35m token sale in June 2018.
As CEO of Acudeen Technologies Inc. Magellan Fetalino III detailed how the blockchain technology deters fraud in his company’s online platform for receivables discounting.
Acudeen’s platform enables small and medium enterprises to sell their receivables to a network of funders to raise the money for their daily operations. Blockchain secures the integrity of transactions by allowing financiers such as banks to detect whether an invoice has already been financed elsewhere, thus preventing double-invoicing. “This is the use of blockchain for Acudeen,” Magellan said.
Today, Acudeen’s ACU token is actively traded at the BTCEXA Exchange.
Finding Treasures in a Pile of Garbage
In the world of ICOs, Acudeen is more the exception than the rule. It is one of the priceless finds amidst the many unsuccessful ICOs.
Various reports lament that a significant percentage of the companies that launched ICOs — which were mainly for the purpose of raising funds — last year turned out to be garbage, leaving behind a number of burned investors in their wake. The website Deadcoins lists some of the cryptocurrencies no longer with us.
These scammy companies that have joined the ICO bandwagon have not escaped the attention of national regulatory bodies. Nonetheless, while there are nations that ban crypto trading (China, for instance), there are others that are more pragmatic, allowing new technologies time to evolve while slowly addressing issues that could affect retail ICO investors. Singapore, for instance, is one of most popular nations in the ICO space.
Christian Blanquera observed that in the Philippines, regulators have been open-minded toward blockchain as a nascent technology and ICOs as a new fundraising model, engaging in regular conversations with various stakeholders in the tech field, including representatives from startups.
Anatomy of a “Fundable” Company
This brings us to the question: How exactly can a startup with honest intentions — one that eschews the pump-and-dump tactics of the scammy companies — be seen as a “fundable company”?
During the panel discussion, I espoused two strategies: (1) By simply complying with local regulations; and (2) By adopting a “reverse ICO” strategy — the method used by real-world companies to raise funds and get into the cryptocurrency space. Just like these long-established companies, startups that have existing — or better yet, revenue-generating — products consumed or used by actual customers are in a better position to be trusted than those that only rely on an idea (i.e., the “website-plus-whitepaper project”) for their ICO launch.
Founder Institute is the world’s premier pre-seed start-up accelerator started in Silicon Valley. Its program operates across more than 180 cities, including Manila.
Jorge “Jojy” Azurin is the CEO of the health tech company mediXserve, and one of the directors of Founder Institute-Manila.
