The Secret Ingredients of a Successful Initial Coin Offering (ICO): Part one
The cryptocurrency market is undeniably growing. Whether this is a good or a bad thing depends largely on your point of view. Which Initial Coin Offerings (ICOs) have raised money lately – and why? Where there is great hype, is there also great substance?
The market is full of both excitement and suspicion. Serial crypto VC Adam Draper sees the ICO market as evidence of a positive, ‘future-looking’ trend in investment markets. However, Tone Vays – an experienced derivatives consultant and the host of ‘CryptoSCam’ – sees an ICO ‘bubble’ that harkens back to ‘the dotcom IPOs of the late ‘90’s.’
Comparisons to the ‘dotcom bubble’ of the late 1990s and early 2000s are not far off the mark. A new – and legitimately promising – technology arrives on the scene, a great many companies are created to take advantage of it, and investors promptly fall over themselves to make a lot of money in a little time. No spoilers, but it doesn’t end well for all of them.
ICOs offer businesses a radically modern, democratic way to raise money. But they also have attendant risks: their bad reputation is somewhat undeserved but also the natural by-product of a number of fraudulent, misleading, or simply poorly considered offerings. In brief: they’re very, very easy to get wrong.
According to Tokendata, one of the more comprehensive ICO trackers, over 902 Initial Coin Offerings (ICOs) were launched in 2017, of which 41% were regarded a success. From the $5.6 billion that was raised, 25% was raised by the ten largest ICOs. This year got off to a similar start: the first three months of 2018 saw ICOs collectively raise $6.3. billion – well over the total for 2017.
So, if you’re looking to launch an ICO, you might well be wondering how to do it without imploding. “Don’t commit fraud” is obviously a good start, but it’s also worth thinking about the conditions for success – and failure.
In our latest report, ‘The secret ingredients of a successful Initial Coin Offering (ICO)’ we’ve examined ten notable recent or upcoming ICOs – five successes, and five failures. We’ve identified what went wrong for those that failed, and what worked for those that have succeeded.