How IEO solve the issues in crowdfunding?

Crowdfunding has been very popular around the world. Skyrocketed by its popularity, many companies including startups find it a better source for funding their business projects. It benefits the projects or companies to achieve the right growth. Initially, ICO's served the perfect way to raise funds for the projects. 

Though ICO's came as a boom, in the beginning, it's market started declining as many fraudulent activities are carried out including Ponzi schemes. As there are no regulatory procedures, ICO became risky for investors. 

And the era of IEO began!

IEO - The game-changer!

Initial exchange offering is a new crowdfunding mechanism introduced in the blockchain industry in order to raise funds for crypto-based projects. The projects are listed and launched in a public crypto exchange. The exchange will launch the token and move with the promotional activities. The project team will also move with the fundraising process. 

The value IEO services provide 

When ICO's market starts declining, the need for a secure and reliable crowdfunding mechanism was demanded by the crypto community. The entrepreneurs or startups attempt to raise money to fund their project by investing a lot of time and effort. They engage themselves in marketing and other promotional activities in order to make people aware of the project and make contributions.

Sometimes the startups or the project team may not be technically sound to program and launch their campaign. IEO's emerged in a revolutionary way giving more importance to the exchanges.

So now just look into the steps for launching a successful IEO campaign

Pre IEO

• Framing an idea
• Fix a budget to launch the IEO
• Build a strong team
• Token developing
• Choose the exchange platform
• Draft a whitepaper
• Website building for marketing

IEO

• After token minting, tokens are listed in the exchange
• Crowdfunding

Post-IEO 

• Market the project by proper outreaching investors
• Social media marketing 

1. Project team

• Token sale in less time
• Easy KYC/AML 
• Increased chance for raising funds with direct access to a big user base
• Access to experts
• Bring credibility

2. Exchange

• Access to a wide range of coins
• More attention is gained hence more revenue

3. Investor

• Minimal effort needed to invest. Just need to create an account on the exchange
• Undergo KYC process
• High security offered
• No need to verify the project's authenticity
• No entry barrier

Does it ensure trust?

When comes to the matter of trust, IEO's offer the investors to invest without much research or investigation. The exchange stands as a trusted third-party, analyses the authenticity of the project and list in the exchange.

IEO and ICO - A comparison

Factors	IEO	ICO
Accessibility	Account-holders in the exchange can participate in the IEO event	Anyone can participate and invest or raise the funds
Account	Participation in the fundraising event is easy. Just need to log in directly to the exchange account	Need to undergo a KYC process or other means identification. The investor need to sign up in the exchange account
Marketing	The exchange will do the marketing and promotion. By listing in private exchanges, the company also can make the coins popular.	A lot of time and money to be spent on marketing in order to reach the target group
Security	The investor need not have to be concerned about the security side. Exchanges ensure security by proper project verification	The investor needs to take care of the security factor. Otherwise, chances to manipulate the funds
Risk	Exchanges need to ensure their reputation. Therefore validates or verifies the projects and its relevance	No proper validation and if the investor didn't ensure the relevance or verify the project, it will be risky
Liquidity	White paper screening and project validation are done by the exchanges and it will attract potential investors. Hence higher liquidity	Investors need to spend a lot of time and effort, hence lesser liquidity
Transparency	A white paper with all project information is ensured by the exchange and thereby ensures a better level of transparency.	The white paper may not contain enough project information and the investor need to verify everything. So lesser transparency

Country-wise IEO raised in 2019

Future of IEO

IEO's are an emerging crowdfunding model. As IEO minimizes the effort and time, the investors tend to give importance to this new crowdfunding model. But they need to fully understand the token distribution of a project before investing. They should also ensure that the exchanges offer investor protection measures. 

Due to the lack of a proper legal framework, many countries still find some uncertainties in this crowdfunding model. Exchanges also have to ensure that they verify every project and launch only high-quality projects. 

IEO is offering and establishing a successful strategy for companies, exchanges, and investors. Though in the infancy state, IEO attracts the potential target. The only thing needed is to follow the legal procedures and never get trapped.

 As technology is advancing, new changes are added to bring trust in all the transactions. Crypto enthusiasts are trying to bring innovations to make everything transparent and to ensure trust. IEO was introduced replacing ICO for ensuring a better experience. Similar changes may be introduced by the crypto enthusiasts.