With so many ICOs not getting funded…. is the ICO Market Dead?
The crypto industry is getting professionalized at a much faster pace than the traditional financial services industry did (or considering what happened in 2008… it’s still doing…)
But according to ICO Data in July and August 2018 ICOs raised more than 800 million USD – this might or might not be accurate numbers but they indeed show that someone is getting funded out there… some people are doing it right.
These are some commonly believed fallacies about the ICO industry and our view on what works now:
1. “Because of presumed market manipulation market sentiment is negative”. Be that as it may, market sentiment has never been correlated with Venture Capital funding. Normally is correlated with Venture Capital exists, not investments.
2. Pundits claim that because many projects that got funding are going sideways investors have abandoned the market. In my opinion this is actually great. Unqualified investors should have never entered the market in the first place – “FOMOing” people is not a way to add investors to a professional market.
3. “The cryptocurrency industry is being pushed towards the capital markets industry”. This may or may not be true, but again, this is not correlated with funding, and if anything it should be positively correlated with funding, the capital markets industry has much larger exists, which is what investors want.
4. Many public sales don’t get funded. Again, this is normal, in the Venture Capital industry less than 3% of companies get funded, plus we come from a period of irrational exuberance where very questionable projects got funded – this retracement is normal.
And the list goes on and on…
Let me clarify: It is still easier to raise funds in an ICO than with traditional Venture Capital. The odds are still in the ICOs favor.
What is not in the ICOs favor is presenting a lousy business model with weak revenues or absurd overpromises and expect to convince people with an expensive marketing campaign.
What works now is business models that make sense, talking professionally to private investors and above everything else, be serious, responsible and deliver on your promise.