The transition from most/all ICOs having some type of Blockchain technology, to
any type of Startup utilizing the ICO fundraising model will result in a paradigm shift in the way Startups raise capital.
Currently, Startups have five major access routes to funding:
- Bootstrapping
- Venture Capital
- Angel Investment
- intrapreneurship/Internal Corporate Funding
- Crowdfunding (Equity & Reward Based)
Each funding route has their upsides and downsides, but more interestingly, almost every single one of them has two key business goals: 1. The Exit, or 2. The IPO.
We have the traditional statistics for Startups: 90% will fail within the first three years. 10% will go on to bigger and better things, which could mean scaling over ten years, potentially Exiting to a larger company (such as Amazon or Google), and the remaining (under) 1% will go public, with an IPO.
The introduction of the sixth major route to funding - the ICO - will hugely disrupt the entire space, allowing Startups to offer tradable tokens from their inception, which is something Wall Street can't, and won't, ever offer. Along with this new development will, of course, come a lot of over-inflated, over-valued, and hugely over-estimated companies; without Wall Street's stringent policy for IPOs, and the barrier to entry will be incredibly low.
It may take a number of years for the ICO route to truly disrupt Wall Street, but I for one think that in the near future, a token-based model will overtake the traditional IPO funding model.
Show Posts
