Why ICO’s Are Better Than Crowdfunding
More and more crowdfunding platforms are turning to Initial Coin Offerings in order to stay relevant. There is good reasoning behind these moves. ICO’s are better deal for everyone.
Less we paint an overly rosy picture, ICO’s are not perfect. They have only been with us a short while so you can expect to see plenty of innovation in the time ahead. What is already good will get even better.
In the past we have voiced the view that ICO’s represent a far better and less dilutive means of raising capital for founders. The reasoning is that the more equity held by the founders the greater incentive for them to put in the 18+ hour days typically needed to launch a venture stage company.
Traditional startup investors normally demand 25%-35% or more of a company’s equity. This is true no matter if the investor is an Angel, Venture Capitalists or sourced by crowdfunding. By the time a young high growth company finishes round two or three, far too often, the founders are left with only token ownership. This is a huge disincentive and the reason why so many VC financed projects fail.
The ICO helps level the playing field since maximum equity ownership is held by the founders.
But there is another side to this story. ICO’s can be a much better deal for investors.
The value of the cryptocurrency goes up as the business succeeds. And there is improved liquidity. If, for example, you put $100,000 into a VC fund you are typically locked up for two years or more. If you invest directly in a crowdfunding project, you could be locked up even longer with no liquidity in the event of a personal financial emergency.
No so with an ICO. Service tokens can be used to acquire the product or service of the issuing company. Exchanges seem to be popping up every week offering liquidity (for a fee of course) where the value of tokens is quoted in Bitcoin, Ether or national currencies.
As we have already mentioned, we’re not out simply to paint a rosy picture about ICO’s. One of the loudest critics complains that far too many poorly conceived and hastily executed business plans are getting funded.
I will be honest; I have not looked at every one of over 300 ICO’s so I cannot judge the merits every single one. On several occasions we have emphasized the importance of doing enough research to answer three simple questions:
1.) Does the business fill an unmet need?
2.) Is there a large addressable market?
3.) Is there bright hard driven management to execute the plan?
A few companies like SilentNotary can answer yes to all three questions.
An Unmet Need
We live in a world today where trust is being challenged more than ever. SilentNotary is a digital notary that saves and certifies documents, emails, images, chats, audio- and video recordings while securing authenticity using blockchain technology.
A Large Addressable Market
There are over 2.3 billion people worldwide dependent on trust whose everyday lives would be improved using SilentNotary. These are not one time users, these are repeat customers. This is only the B to C market
Hard Driven Management
The highly experienced Silent Notary team now totals 14 and growing. These are not just developers, but product designers and marketing specialists. This of course is in addition to experts in legal and finance.
Beyond creating easy to use mobile apps and chatbots, SilentNotary created LightStamp, an in house developed IP (patent pending) that eliminates the possibility of data falsification. This simply means SN can offer the greatest security, a key to building the highest level of trust.
SilentNotary ICO is Underway
SilentNotary has created the world’s first digital blockchain notary and intends to use its first mover advantage to establish a dominant global brand.
One of the first steps is the execution of its ICO.
Join now and watch as the world’s first blockchain notary builds market leadership.
James Waggoner, SilentNotary PR & Communication