On ICOs, Raising Funds, and Focus

Why we decided IC-No.

“Why don’t you just do an ICO?”

In 2017, this seemed to be the default response to a request for an introduction to investors, or even any discussion around funding itself. With reason too; we had all heard of the numerous examples of businesses that raised millions in minutes. It seemed too easy, it felt too easy, and in those days, one could argue it was too easy.

And at the time, staring down the barrel of a moonshot, it was tempting. Because building a business around banking technology is hard.

So we began the process.

With the millions that we would raise, everything would be easier: we could build out our product using the funds and feedback of real customers, bring on the resources we needed, and focus exclusively on building. The dream. So we figured out how tokens could fit into our mission, published a white paper, and got to work spreading the word.

Almost immediately we got interest from some private investors that believed in what we were trying to achieve and bought in during the presale. But before we launched the actual ICO, we made an executive decision to pull the plug. We refunded the investors that had participated, and cancelled the ICO.

This is why:

We care about what we do

We are on a mission to improve banking. That mission has taken us to many different places, from the marble mountains of the BIS (Bank for International Settlements) to the the gush of Crypto Valley, and has even involved multiple iterations of what “improve banking” means.

But what it doesn’t mean is compromise. In fact, it means exactly the opposite. Banking is one of those industries that is notoriously difficult to change and those that want to try, need to have a clear and focused intent. An ICO meant that we would be focusing on building an economy around a token, rather than building a community around our product. The difference for us was everything.

Reputation is more important than funds

Almost 80% of ICOs turned out to be scams. That statistic doesn’t clarify which started with honest intentions and decayed or simply failed, and which were malignant from the start. What is does clarify is that the entire space was toxic, and this toxicity was palpable.

It was enough for us to examine exactly why were were conducting an ICO in the first place. It boiled down to funds. But at what cost? Sure, raising through an ICO meant that we wouldn’t necessarily be giving up equity — a valuable asset — but it did mean that every time we had a conversation with anyone with any real clout in the financial space, we had to do more than convince them of our business, we had to convince them of our intentions. Reputation was simply too high a price to pay.

Fund raising is about more than just funds

There is a reason that raising is difficult, but it’s not for the reasons everyone thinks. Most would assume it’s because money is hard to come by, but the truth is there is more than enough capital available for viable businesses. The real reason that raising is tough is that successful businesses are hard to come by. Effective execution is valuable because it is rare, and that’s the difference between ideas and businesses.

What’s more, investors are not just investing funds. They are investing time, effort, insight, experience and their own reputation. Often times, these elements are far more valuable than the money itself. Smart founders know that, and so do smart investors. Funds are a means, not an end.

Market ethics (or lack thereof)

When we looked at an ICO, we looked at how we could raise funds, but we also investigated how our investors could get real value from our tokens, regardless of whether they invested in our utility or our growth. For utility, this meant that we had to look at ensuring that our token was at the heart of our business. For growth, it meant that we had to look into exit strategies: listing on exchanges, etc.

We didn’t like what we found. Almost the entire market orbited the growth side of things, and in an unregulated environment, this meant that it had nothing to do with the soundness of the project. Rather, it had everything to do with the sound of the profit. From “pump & dump” groups to listing fees, we quickly realised that the market would take advantage no matter how good our intentions were.

Traditional funding has blockers for a reason

The barriers to funding through traditional means are not arbitrary. Like regulation, they develop through natural selection. The reason that business models are so scrutinised is because so many fail, and the reason that a team’s experience is so highly regarded is because it’s so valuable — the lack of either can be lethal. And the reason that there is so much paperwork is because the lack of paper work, somewhere along the line, resulted in investors or founders getting screwed. Or both.

In fact, almost two years later, if we look closely at what’s left in the rubble of the ICO meltdown, the businesses that are still conducting token sales are doing so through private deals with experienced capitalists, and many are going through the same rigorous vetting process that traditional funding galvanised.


But in the end it came down to priorities. What did we think was important? What did we believe in? The answer was always: improving banking. To do that, we needed to work with banks, regulators and the existing financial system. One of the biggest eye-opening realisations was that those entities — that were often tagged as the culprits — were trying to make thing better themselves, for the most part.

Central Banks and regulators weren’t evil “big-brother” type oppressors, but rather conservative realists trying to prevent bad actors. Financial Institutions (at least those focused on retail) weren’t greedy capitalists trying to exploit people, they were capitalists trying to add value. And the existing financial system wasn’t designed to be inefficient, it just happened to end up that way.

We simply realised that things change far quicker with collaborative effort than by throwing money at a problem.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store



API first banking infrastructure for digital assets and fiat.