I'm going to start by saying that what I am interested in is private corporations and DAOs. I think there is a lot of the hot air in the ICO market and much of it lies in copy coins and baseless enterprises. Having gotten that out of the way, there are some very interesting opportunities opening up in the space but having read quite a few white papers, there seems to be a bit of a gap from an investor standpoint...
A class A share in Google, for example, gives you the shareholder legal rights. It's very clear in the share offering prospectus and there is a legal framework supporting these rights based on whatever jurisdiction they are incorporated in. ICOs don't seem to have the clear prospectus like legal framework in their offering and as a professional investor, this tells me one thing - Risk.
I understand that a DAO has much of the legal framework built into the organisational infrastructure of the smart contracts but what is to stop operation embezzlement? Private corp ICO don't even have this DAO smart contract infrastructure so it like swimming naked with hookers. There are no real rules and it's the honour system. Or is it...?
Seems to me that it's a real catch 22 for private financing (outside a DAO) because if you want to offer that legal framework (important for mass adoption) you need to incorporate your share certs into the blockchain but my assumption would be that many incumbents jurisdictions would want to regulate the crap out of it (raising cost and taking all incentive away). So you incorporate on an island. Problem solved.
Still the embezzlement issue.
I think this will be problematic for private corps seeking to finance via ICO until a "non-cookable" accounting framework can develop alongside the blockchain. Imagine if the books put themselves together based on a wallet based application. As an investor, you could see the companies books real time. An uncookable accounting framework would really get investors going.
So when you create this, please make it a DAO and let me know when the ICO launches.
Cheers,
