On ICO’s/token sales:
How does this method of capital raising differ from VC or traditional forms?
In comparison to traditional finance, ICOs (or token sales) differentiate themselves from traditional financing by their speed and efficiency. They enable companies to bypass third parties and directly attract willing individuals wishing to participate in the company’s crowdfunding initiative. To date approximately $1.7 billion USD has been raised through this novel funding model, with more than $500 million USD coming in July alone.
In the long and arduous process of traditional capital raising by accelerators and VC models, start-ups find themselves in a hamster wheel of building a proof of concept (POC) and then urgently trying to find the next client, or attempting to survive while the wheels of large corporates churn.
With the introduction of token sales, entrepreneurs are now watching as projects promptly receive funding, enabling them to begin the development of bringing their idea into fruition instantaneously.
How can budding entrepreneurs bring an idea from a piece of paper to a fully-funded project with a token sale?
Entrepreneurs who usually needed the approval of VCs or other third parties now have the power to use token sales to directly raise funds. Ideas, ambitions and dreams are no longer up for questioning by a single entity, but are allowed to prove themselves through crowdfunding. The market is therefore the ultimate judge rewarding projects with the necessary resources to become a fully-funded and independent project.
Start-ups only require minimal revenue to be capable of raising the capital necessary to start a business, regardless of geographical borders and financial status. Fundraising for a new business is no longer limited to high society. With simple access to a mobile phone or a cell phone tower, individuals globally now have the same opportunities as those with a substantial financial backing. This levels the playing field and unleashes the true power of the free market, allowing individual participants of token sales to decide which project is worthy and which one is not. Companies now communicate directly to the market and their community by establishing marketing channels and outlining whitepapers, ensuring transparency to all stakeholders.
Co-Founder & President of the Lisk Foundation and Director of the Lightcurve GmbH
Max Kordek is a tech entrepreneur and globally recognised blockchain visionary. He is cofounder and president of the Lisk Foundation, the not-for-profit arm of blockchain application platform Lisk, based in Zug, Switzerland. Mr. Kordek is also the director of the Lightcurve GmbH, a rapidly expanding blockchain consultancy.
He immersed himself in the global startup community from a young age, beginning at just 14. Over the past four years, Mr. Kordek has become an active participant in the blockchain and cryptocurrency industry, gaining invaluable knowledge of bitcoin and altcoins. With a clear vision, the necessary motivation and the know-how, Max partnered with Oliver Beddows to co-found Lisk in 2016 and has lead the organization to where it is today.