Using an ICO to fundraise for a traditional company

[magik20]

I've been in Crypto since 2014 (running a 30 computer mining farm for a time as well) so the technology has always intrigued me.

I'm presently fundraising for a telecom company that has about 1/3 of the funds needed from local investors.

A few days ago, catching up on the current state of Crypto I ran into ICO's.

I realize at present most (all?) ICO's are usually directly Crypto related, however I was thinking perhaps it would be an interesting way to raise capital for my new startup.

My (very rough) idea is:

Create a fixed number of tokens based on the ETH chain?

Advertise the ICO and describe in detail our business plan (without giving away too much information to protect ourselves from our competition unless an NDA was signed) including all of our team (our team has some very qualified people with 20-30 years in big business, great reputations etc)

Sell the token for BTC / ETH etc to raise capital

Assign shareholder certificates to the token owner (same legal projection as our local investors)

Once profitable (we forecast just under 2 years) quarterly we pay a dividend back to the token holders in BTC / ETC etc.

We are looking for a 10% quarterly dividend based off profits, also the same deal the local investors are getting (but the token holders would instead receive the USD equivalent in BTC / ETH etc)

All our books would be audited by one of the big 4 accounting companies...

So, overall, does this idea have merit? Have ICO's been used in this capacity yet?  I do see a new crypto mining farm doing their capital raise with an ICO, hence giving me some faith this could work.

[Crankautist]

What are the legal implications of a ethereum smart contract in the real world though?

If company x doesnt pay dividends or goes bankrupt what happens then?


I was thinking about that too but crowdsale in crypto kinda lets the investor standing in the rain.

[magik20]

What are the legal implications of a ethereum smart contract in the real world though?

If company x doesnt pay dividends or goes bankrupt what happens then?


I was thinking about that too but crowdsale in crypto kinda lets the investor standing in the rain.

Our shareholder agreement would hold us legally responsible to honor the contract with token holders, we could also put a significant amount of BTC or ETH into a escrow to ensure a growing level of protection for the holders?

[Kang TB]

good idea, but ICO is initial coin offering
so you must have some Coin or token that will be offered to investors or contributors
and think about how can the investors get profit by contribute in your ICO project,
not only think about fundraise for your company,

[magik20]

good idea, but ICO is initial coin offering
so you must have some Coin or token that will be offered to investors or contributors
and think about how can the investors get profit by contribute in your ICO project,
not only think about fundraise for your company,

Well the token holders would be getting a dividend every quarter in cryptocurrency. That should also increase the value of the token itself yes?

[disam]

could be a legal mess, not cryptocurrency anymore but asset area.