ICOs (Initial Coin Offerings) continue to draw plenty of attention. In the first 9 months of 2018, the total generated amount has reached over $ 20 bn, representing a 333 % increase compared to 2017. There are numerous reasons why ICO launches have become some of the most promising ways to raise capital in particular for SMBs (small and medium-sized businesses).
- Direct access to investors
Traditional brokers have dominated the market for a long time. Their ways of doing business is often neither transparent nor the investor or the company who raises the capital control the process. In addition, the price per share is often artificially blown up and the broker deducts a double-digit commission. As a result, a large percentage of the invested money does not end up where it can yield any ROI.
- Banks are focused on large corporate customers
Most established banks are reluctant to give SMB’s access to strategic loans. Decision-makers who work for those financial institutions often do not understand the business models behind small innovative companies due to the lack of technical knowledge. Also, their internal processes are mostly geared towards the needs of large enterprise customers, since focusing on those established businesses is still considered to be less risky. Ironically, it was precisely this focus which led to the financial crisis ten years ago.
- Technological shift
The advance in technology has already changed the bottom-end of the financial pyramid – micro-lending services and crowd-funding platforms have changed the way retail customers and SMB’s access investments and credits. ICOs and related services are to be seen in a wider context of retail customers and businesses who are emancipating themselves from the traditional ways of doing finance. The mortgage sector and corporate money transfers are going to be the next areas to benefit from a wave of innovation.
Whereas the capital invested has tripled, the number of ICO’s has also increased but at a much slower speed – a first indicator that investors are looking for quality rather than quantity.
The good, the bad and the ugly
In the late 2016 and during the whole year of 2017 massive funds were poured into countless ICOs Among many great ventures and business ideas there were some who did not have much of a compelling or realistic business idea (and a business plan, that is). There was fraud too, some prominent cases made it into the mainstream press.
From an investor’s perspective, 2018 is good news. The market is still growing, but whereas the influx of new capital tripled, the amount of ICOs only doubled. Investors are looking for more “meat on the bone” before releasing funds and that idea certainly makes business sense.
About the importance of a realistic yet innovative business concept
Does your business idea make good use of the Blockchain? Great.
Is Blockchain creating leverage or is it adding additional features, such as enhancing the security of your project? Fantastic.
But is your venture still looking good when you remove the Blockchain and does is still make sense? If the answer is no you are going to experience more and more difficulties when raising funds.
ICO Services – giving your project the attention it needs
ICOs have a well-defined timeline. Within this timeline, the magic needs to happen. A solid, yet creative marketing, communications, and social media strategy needs to be developed and executed. Aryxe ICO Services are designed to maximize your time and resources. We make sure your message is heard and you get the attention you deserve. Our end-to-end model ensures not only a short reaction time with minimal overhead costs, it is also the most efficient way of collaborating.
Visit our ICO Services page to find out how we can help you to plan and execute your ICO project. – aryxe.com/en/ico-services/