Phased ICO

[2342q6tegw]

Would it be better to replace the ludicrous amounts of money raised by ICOs. Just like how start-ups spread there rounds over weeks, months and years. That way at the time of the second round we would be able to see what (if any) progress was made.

 We could reduce the amount in to scammy ICOs since each one would take less as a proportion, any scam could be identified at an earlier date when less crypto has gone in to it. Perhaps we should adopt the city approach and design our own decentrlised regulation "blue book on the blockchain) before governments step in with their regulation.

[Everandi]

In that case youll need some kind of global escrow service, that keeps all the ICO's investements until the project launch
And how will they launch at least beta without any money?

[2342q6tegw]

As to the global escrow service well that's exactly what a smart contract is perfect to do (see  DAO) while that does need funding it's only ones then all the ico arecdone. In fact this forum marketplace has a global escrow service, and it's pretty easy for the escrow holder to see what accounts crypto came s from.


If it's an eth you can build a beta on ropstein or Kovan, they wouldn't have no money they'd have less. €120,000 should be enough for most ICO rounds.  Those tgatvbeed more should perhaps be secondary coin offerings.

[paxmao]

Would it be better to replace the ludicrous amounts of money raised by ICOs. Just like how start-ups spread there rounds over weeks, months and years. That way at the time of the second round we would be able to see what (if any) progress was made.

 We could reduce the amount in to scammy ICOs since each one would take less as a proportion, any scam could be identified at an earlier date when less crypto has gone in to it. Perhaps we should adopt the city approach and design our own decentrlised regulation "blue book on the blockchain) before governments step in with their regulation.

What you are describing is a lesson that Silicon Valley learnt many years ago during the dot com bubble. At the beginning of the ecommerce revolution and e-services revolution, many ridiculous projects were founded with staggering amounts. There are some very famous cases.

WEBVAN is one of the most famous. A huge logistics system setup across several major cities... to simply find out that it was too early. And it was by no means the only one.

As you say, now the entrepreneur must go through  several rounds of financing and show that they are on the roadmap and have achieved the expected progress with the funding they've been given. The exceptions are normally those who have already established a awesome reputation for their previous successes.

That is why you should consider carefully investing in ICOs that ask for a very high valuation and have nothing to show yet. Some of them are in fact doing ICO because they know that the Venture Capital funds and angels will not provide the funding for a project that has nothing solid.

[2342q6tegw]

Indeed the typical startup was my inspiration, although they probably raise too much in early rounds. I'd love to see some founders and friends and family crypto rounds (€20k) initially because not everyone can afford to raise that themselves.

I don't think not getting angel funding should be considered bad by default because the major issue is how localised the funding is for these. ICO backers don't seem too worried about having people within half an hours drive. There is no reason to suggest that the next big startup will come from silicon valley. However for some reason crypto people don't seem to be doing angel investing, they would be perfect for it.

[Cardan0]

Indeed the typical startup was my inspiration, although they probably raise too much in early rounds. I'd love to see some founders and friends and family crypto rounds (€20k) initially because not everyone can afford to raise that themselves.

I don't think not getting angel funding should be considered bad by default because the major issue is how localised the funding is for these. ICO backers don't seem too worried about having people within half an hours drive. There is no reason to suggest that the next big startup will come from silicon valley. However for some reason crypto people don't seem to be doing angel investing, they would be perfect for it.

Those looking for funding today have to follow process of Seed (A), Development (B) and sometimes an acceleration (C) rounds. With ICO is different but some companies are thinking doing ICO rounds like with venture funding. There are already articles on where is this going: https://techcrunch.com/2018/01/31/ico-rounds-are-coming/

[2342q6tegw]

I agree with this but I think the round sizes need to go down. 20k hard cap round sizes should be viable in crypto, even if others are not.

[Cardan0]

I agree with this but I think the round sizes need to go down. 20k hard cap round sizes should be viable in crypto, even if others are not.

20k won´t buy you two months of a couple of developers in San Francisco plus some CEO expenses. Any project with less than 200k funding is just delusional to generate software, not to mention if the ICO is about "real world" products.

[2342q6tegw]

There are plenty of good developers outside San Francisco, the real advantage of crypto is that the projects are geographically agnostic. San Fran users buy tokens in Czech projects even when angel investors would by invest. This gives them the chance to start something and then build on it with further investment. There's no need for them.to move to San Fran blockchain is widely available throughout the globe.

It should be enough to do some marketing, customer interviews, and prototyping. I would love to see an ICO with a clickable prototype on invision. The CEO can do that before worrying about developers, (the CEO can always move to a lower cost of living country thus lowering his expenses)

Remember there is founders own round (well below 100k even in San Fran) and friends and family rounds before pre-seed. Why not ICO at the very beginning? Why not set the caps of each round at those levels?

Companies are producing real viable software with small amounts. 100k does seem to be about the pre seed amount but by then there is traction prototype team etc. This seems to be handled by giving cofounders equity  (well.toi could pay expenses and give tokens possibly. ) you can change the numbers slightly for cost of living.

The first round can cover say 4 months, then the second round can begin promotion after they have had a month to actually produce something then at end of month 2 start raising 8 months bridge then raise more runway etc. Unlike current icos by the time your raising a million there woukd be substantial progress made. Even a 200k first round cap would be an improvement but the founders ought tonnage something to show by then IMHO. You don't say idea give me 200k and get a cheque  (Or maybe you do if you live in SF, I can't speak to that)

[2342q6tegw]

There are plenty of good developers outside San Francisco, the real advantage of crypto is that the projects are geographically agnostic. San Fran users buy tokens in Czech projects even when angel investors would by invest. This gives them the chance to start something and then build on it with further investment. There's no need for them.to move to San Fran blockchain is widely available throughout the globe.

It should be enough to do some marketing, customer interviews, and prototyping. I would love to see an ICO with a clickable prototype on invision. The CEO can do that before worrying about developers, (the CEO can always move to a lower cost of living country thus lowering his expenses)

Remember there is founders own round (well below 100k even in San Fran) and friends and family rounds before pre-seed. Why not ICO at the very beginning? Why not set the caps of each round at those levels?

Companies are producing real viable software with small amounts. 100k does seem to be about the pre seed amount but by then there is traction prototype team etc. This seems to be handled by giving cofounders equity  (well.toi could pay expenses and give tokens possibly. ) you can change the numbers slightly for cost of living.

The first round can cover say 4 months, then the second round can begin promotion after they have had a month to actually produce something then at end of month 2 start raising 8 months bridge then raise more runway etc. Unlike current icos by the time your raising a million there woukd be substantial progress made. Even a 200k first round cap would be an improvement but the founders ought tonnage something to show by then IMHO. You don't say idea give me 200k and get a cheque  (Or maybe you do if you live in SF, I can't speak to that)

[Cardan0]

There are plenty of good developers outside San Francisco, the real advantage of crypto is that the projects are geographically agnostic. San Fran users buy tokens in Czech projects even when angel investors would by invest. This gives them the chance to start something and then build on it with further investment. There's no need for them.to move to San Fran blockchain is widely available throughout the globe.

I think that you have been reading some old literature about start-ups in which 2 guys in a garage change the world with the mere power of their programming abilities, etc...

While that is not impossible it, nowadays you need plenty of cash to grow or someone else will be first to market. The two guys in a garage is possible when those two guys are the two top MIT graduates working in world-class projects and even then they would eventually need dough.

There are plenty of good developers outside San Francisco, the real advantage of crypto is that the projects are geographically agnostic.

There is a good reason why there are world-class hubs for start-ups, and that is mostly because investors are already there and don´t like flying to Zcech Republic and because startups multiply their value when they are in close contact with other startups that create synergies. Just try to figure why many countries that have tried to replicate Silicon Valley have failed. It is cultural and it cannot be improvised.

I think you are on the belief that you can form an international team that have never met in person, do some signature campaign here and there , write a white paper and get a few millions. It does not work like that at all. You have to meet in person with high worth individuals and funds to get real advice and real funds, attend many events and possible get backing from some of the main people in the blockchain world. Silly investors are all burned by now, or should be.

Friends and family rounds are not rounds. Your auntie Ilga is not giving you 5k because your business idea makes any sense, she´s doing it because she is your auntie Ilga. They would put the money without reading a figure from your plan.

- the CEO can always move to a lower cost of living country thus lowering his expenses

- You are dreaming.

I think that ICO should be doing rounds yes, and in fact the companies behind ICO do it with shares (tokens are just an extra to boost community and hype).

[2342q6tegw]

I will admit both old and no us literature. The thing is language can be a moat. Name the top ten start-ups that only work in the German language. What about those in the estonian language? They can get something out there without giving up too much. Although there is a definite second mover advantage.  Webvan was there before deliveroo. HD DVD was earlier than blu ray and laserdisc was even earlier. Google wasn't the best search engine if your tech is your most then perhaps you can take a later development.

Your right that SF is popular becuase of investors and moving there gives you a higher valuation, if you don't need investors  (see atlassian, automatic, bufferr) then there is no need to move. If there were no investors then the value wouldn't be there.  Sure investors won't fly out to prauge but how many of you have brought in an ICO and actually visited their headquarters? Have you looked for their corporate structure? Is a us company important? ICOs don't seem to have that worry, that companies needing investment do. Startup synergy might be the harder part to replicate or provide to non US projects, perhaps they will need a round in order to setup US offices, thats becoming an intewrnational team though.

Perhaps rounds isn'tr the rooght word, however I dont see why ICOs can't or shouldn't be a friends and family. Not everyone has friends and family or there own money to invest in them.
So why not at ICO? The angel investing rules don't need to apply although I think there is a great chance there for some kind of cross pollination.

Vitalik managed it, now while you do need lots of cash, what I'm saying is you don't need it all at once like ICOs raise it. Now while there are multiple rounds pre ico, so why not have 4 months or more between them?

No I'm not talking about an international team that have never met in person, if the whole team is in say prauge then that's not international  (Eth is based in Switzerland, not usa.

I doubt silly investors are all burned, the hype hasn't reached a lot of eastern europe yet and my discussion groups seem to be fall of them. I'm curious as to where these ICOs ar
 emeeitng their investors though. They rarley seem to mention that on their pages. Has anyone here heard of an event where people come to introduce/pitch their ICOs to invesotrs? I'm suprised at the amount they seme to raise without anykind of prototype. Hell  scma rtists have raised large amoutns of money form "private centralised blockchains" (no they can't show you the explorer)  

- You are dreaming.

I think that ICO should be doing rounds yes, and in fact the companies behind ICO do it with shares (tokens are just an extra to boost community and hype).

Why? If they don't need to be anywhere, then what does it matter where they are? It is only an issue if you need investors.(or maybe "synergy" There are plenty of digital nomads with their own niche software products that run form Bali or wherever. Now if you could raise money without being anywhere in particular

I'm glad we agree on rounds for ICOs, I guess we disagree on size of rounds. Time between them is also something that needs to be discussed.

[paxmao]

In that case youll need some kind of global escrow service, that keeps all the ICO's investements until the project launch
And how will they launch at least beta without any money?

There are already several coins that used phased ICOs. One of the ones I "worked" in as translator recently has certain milestones set, and if they are met they will sell more tokens to keep growing.

[2342q6tegw]

Can we have a name or a link? I've seen ones that have pre ico a few hours/days apart but not a milestone one. That sounds very interesting.