Will ICOs Change the Rules for Companies Looking to IPO?
A New Type of Equity
Initial Coin Offerings / ICOs have been one of the hottest topics throughout 2017, allowing new companies to produce massive amounts of wealth while circumventing the traditional roadmap of investment and equity distribution. In today’s video, we go through some of the exciting aspects of ICOs and using token systems for a company over the IPO route.
Initial Coin Offerings provide a way for companies looking to integrate blockchain tech to kickstart their operation by selling their own token. The number and initial price of the coins are determined by the team and anyone who believes in the company and/or the financial potential can purchase the distributed amount. We’ve seen companies ICO for 10s, even 100s of millions, all without giving away even 1 percent of traditional “company shares.” This changes the whole decision-making dynamic of businesses and opens up new ways of empowering the token holder compared to how stocks/shares operate after an IPO.
Do you think ICOs will be a mainstay and valuable tool for the foreseeable future? Or do you think it’s a short-term gimmick? Do you ever see yourself pursuing an ICO? Let us know what you think below!
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Yes, definitely ICO's will chage the way companies raise money and go public.
I like the idea of giving investors good return in the form of increase in the price of your coin without giving any share in the company.
I am just worried when governments will allow that publically.
It'll definitely take some time for local governments to wrap their heads around this one. Time will tell!
It's a fascinating way to democratize the windows open to "investors" (with ICOs, everyone!)
There is one "small" problem around ICO's ... Frankly only few coins will be succesfull in the end.... and other people will lose money like in " DOT.COM bubble " ...
I am also for free economics but I feel that these massive raising money from ICO's without any regulations can be very bad for a lot of people...Thats why Facebook block ICO's advertising...HUGE RISK and many people are not aware of that risk in my opinion ..
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I was just thinking that someone should do a video on this... Awesome! You should consider making a step by step vlog on this for people to be able to follow along with the steps as well as additional ideas you might have. I wish people would think #Steemit through on something you mentioned in this video. We should all help each other be successful. Doing this not only reciprocates the support, but everyone becomes successful together. And even further, #Steemit then becomes more popular.
Definitely agree, would you be able to expand on your record label ICO analogy?! I am interested to see how a community that invests in a local record label would evolve and are the pros and cons. How does if affect the record company, how does it affect individual community members, and how would this compare to the current way of doing things.
Would love a more practical example, thanks @sndbox
Thanks for the great question @walnut1! Another way to look at the ICO analogy is through the lens of an SMT (or Steem's Smart Media Tokens)... so let's replace the Record Shop with something like a Public Park.
A public park could ICO and create a Park Coin that could be used to fund programs and renovation projects within the park. Park visitors could potentially earn Park Coin for good deeds they provide like trash pickup, food drives or tree planting volunteer work, etc. Those who see value in the potential of this PC economy could invest in the token. As time goes on, you could imagine other parks in the same neighborhood adopting the coin and begin using it to kickstart programs or bolster existing networks.
An ICO could allow local neighborhood to invest in the resources of their "backyard" so to speak. Basically, creating neighborhood equity. Park Coin is far more accessible to people than something like an IPO with limited exchanges, thresholds of investors, and times for trading etc.
So that's just one example of how ICOs can empower multiple types of networks. Ultimately, it's a much more democratized method of owning and supporting a cause, cultural asset, or company.
you can search for different companies. @titanik
How do you mean? Can you give me an example
ICO's offer a great opportunity for new technologies to emerge that otherwise would not make it out the ground floor. However, I see the fault of the system as well, many people will lose thousands and if not millions because the system does not guarantee a return on the investment which is something bound to be exploited by less than honest entities. you said in the article, we are investing in a token which does not offer any guaranteeing that traditional share offers. ok, you support the technology and if the development is good you might see some return however how can you prosecute a team that just gave up after they collected the ICO money.
Thanks for the post. I only know ICO and this is the first time I've heard of IPO. I guess I need more research :)
ICOs are revolutionizing the startup ecosystem and are fundamentally changing the startup landscape because of the liquidity they provide to team members and investors, beyond what anyone thought possible. Kickstarter proved the idea that people were willing to prepurchase a product, and now ICOs are taking that same idea and applying it to software and services. We have barely seen the disruption as few of the companies funded through ICOs have been brought to market, but the future is bright and wide open. Blockchain and cryptocurrency have the ability to revolutionize the way tech gets done now.
For this to fully work, there is a lot of work that still needs to take place. Teams and investors need to avoid pump & dump scams and insiders taking advantage of the public. The industry is still in the early stages, but already is revolutionizing how startups raise money. As more oversight comes into the market, we should see a fundamental shift in how startups provide equity to their team.
ICO’s are a great way to get interest in your project, reward your potential early customers and in some cases raise cash. In my view, rather than government regulation, it will be better computer code that will guide the evolution: “Smart contracts for smarter crowdfunding”.
I think they will change the game. Traditional stocks and trading is so complex to people who haven't taken an early interest in it so it's hard to get into. With ICO's its so fresh and new and this generation that I think younger people will gravitate towards them.
I agree, ICO will be more advanced in 2018 continue to improve progress so people know for investment, I want to know more about ICO so I can invest. success for this program to move forward.
ICO's fame within the next 10 years, it could be more than that time everything will be a lost dream
Thanks for this cryptocurrency news update providing....
i appreciate this dtube channel, keep it up