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Why Initial Coin Offerings Are The Improved Way For Start-ups
An initial Coin Offering(ICO) is an innovative way to raise funds and launch a startup where a company releases its own cryptocurrency with the intention of raising capital to fund the development of the project. These coins are the most commonly exchanged for Ethereum today.
The term ICO (Initial Coin Offering) is everywhere these days. It’s nearly impossible to read anything about blockchain and cryptocurrencies and not come across it. An Initial Coin Offering (ICO) is an innovative way to raise funds and launch a startup.
It is also an opportunity to take part in a project. ICO is a global phenomenon that involves many businesses. For example, they have managed to raise $4 million the first day and a whopping $53 million in total. This made MobileGo’s ICO one of the most successful ICOs in history. This fund-raising tool contains, however, some critical issues, such as the use of tokens that have no intrinsic value and do not generate direct liquidity, and the role of investors in the management of the startup.
what are the benefits of issuing an ICO as opposed to seeking traditional venture capital?
For one, an ICO relies on a kind of crowdfunding to raise capital and thus opens up access to a wider of potential investors than the traditional venture-capital process. ICO raise money without middlemen, such as venture capitals which they will take a percentage of equity of the company. Therefore, ICOs are now raising more money for start-ups than the early stage. According to Coin Schedule, in 2016, there were 46 ICOs that raised $96.3 million. Through 2017 the total number of ICOs has risen to 228 and this also includes one of the successful ICOs, which gathered for $206 million in the software company which launched by Filecoin.
To conclude, ICOs can provide companies with funding without giving away equity or control to investors. Entrepreneurs seeking alternatives to traditional venture capitalism may be wise to thoroughly investigate conducting by ICO as a means to raise money
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