I need a reality check, is an ICO right for me to fund a business?

[hatshepsut93]

1. You call it "business", but it actually sounds more like charity, so which is it?

2. Your token has no utility, it's a share in your hypothetical company, but it's unclear how would it generate profit for investors? And what are the guarantees that it will be distributed?

3. Your token will be an unregulated security, which will attract the attention of the SEC.

4. No one is going to give 1mil to some anonymous guy's ICO these days.

5. There's no hunger problem in America, no one starves to death, the existing solutions work just fine.

[suzanne5223]

ICO is not the right initial offering to raise funds for new project is either you do IEO or STO which investors trust these days. However, i think base the project only on food makes sense because the current pandemic will soon or later lead to food shortage but if you're planning run it as a crypto related project will need to add more feature which will make crypto community to have interest in the project, it will even give your project more utility/support.
In the meantime, you'll also need legal advice in terms of the SEC etc rules and regulations since you're from the US.

[thesmallgod]

I don't understand how you intend making money from your business because you clearly stated you want to be giving food to poor people free ones in a day. When you source for partnership from investors and issue them a token, how do you intend getting profit from your business ? Or when the initial token you issued to get money for the food business is distributed completely and you are done with the previous money invested, you are going to raise another fund. From experience about project startup you are going to end up with a project that is not sustainable and will latter result into shit tokens that will be massively get dump in exchange and later get delisted

[proparty]

You didn't mention how you're going to do business with your startup. It looks not even a business at all if you're feeding people one meal a day, this looks more of a charity and investors that will put money into your startup will get ownership and how they'll make money from that? there's no clear business model that you're actually doing including the marketing and hiring of employees. Most of things that you have mentioned were all cash-out flow and the only cash in flow is the investors money.

I suppose I'm relying on good faith of the investors to continue to contribute money into a business that feeds people for free, the more investors that are attracted to the idea the larger the market cap grows thus improving their ROI long term. Which is different then giving it away to a charity and never seeing a return at all. It is all cash out, the only cash in is the investors contributions and donations here and there. It'd be set up like a non-profit, but as soon as the money stops flowing, the business is done. 

so how investors will be benefited with your ideas if your business Wil only give foods for free?
Its mean they can only get the  ROI they want base on the market value which you don't even know if the project that you will be created will have a value in the future , or it will  the demand you are assuming to have.

It'd be less of an investment to gain wealth than it would be an investment in the belief that no one should go hungry. Like subscribing to Netflix for $10 a month gives you content, subscribing to the food service gives you peace of mind and ownership of the company providing the meals. It'd be in the interest of the investor to talk about the service with others so that more people contribute thus increasing the value of the company. It's a long shot.

[bhadz]

You didn't mention how you're going to do business with your startup. It looks not even a business at all if you're feeding people one meal a day, this looks more of a charity and investors that will put money into your startup will get ownership and how they'll make money from that? there's no clear business model that you're actually doing including the marketing and hiring of employees. Most of things that you have mentioned were all cash-out flow and the only cash in flow is the investors money.

I suppose I'm relying on good faith of the investors to continue to contribute money into a business that feeds people for free, the more investors that are attracted to the idea the larger the market cap grows thus improving their ROI long term. Which is different then giving it away to a charity and never seeing a return at all. It is all cash out, the only cash in is the investors contributions and donations here and there. It'd be set up like a non-profit, but as soon as the money stops flowing, the business is done. 

It's not a business if it's non-profit. And you shouldn't call people that contributes money as investors, they should be donators. Because both words have a different meaning and being called as an investor, there's an expectation of a return of something from what they've invested in.
No investor will invest when the distribution of free meals to people once done, it's already done. I think that you have to clarify that to your donators instead of calling them investors.

[proparty]

1. You call it "business", but it actually sounds more like charity, so which is it?

2. Your token has no utility, it's a share in your hypothetical company, but it's unclear how would it generate profit for investors? And what are the guarantees that it will be distributed?

3. Your token will be an unregulated security, which will attract the attention of the SEC.

4. No one is going to give 1mil to some anonymous guy's ICO these days.

5. There's no hunger problem in America, no one starves to death, the existing solutions work just fine.

1 in 7 people in America go hungry everyday.

[proparty]

You didn't mention how you're going to do business with your startup. It looks not even a business at all if you're feeding people one meal a day, this looks more of a charity and investors that will put money into your startup will get ownership and how they'll make money from that? there's no clear business model that you're actually doing including the marketing and hiring of employees. Most of things that you have mentioned were all cash-out flow and the only cash in flow is the investors money.

I suppose I'm relying on good faith of the investors to continue to contribute money into a business that feeds people for free, the more investors that are attracted to the idea the larger the market cap grows thus improving their ROI long term. Which is different then giving it away to a charity and never seeing a return at all. It is all cash out, the only cash in is the investors contributions and donations here and there. It'd be set up like a non-profit, but as soon as the money stops flowing, the business is done. 

It's not a business if it's non-profit. And you shouldn't call people that contributes money as investors, they should be donators. Because both words have a different meaning and being called as an investor, there's an expectation of a return of something from what they've invested in.
No investor will invest when the distribution of free meals to people once done, it's already done. I think that you have to clarify that to your donators instead of calling them investors.

The return they get will be in half of their total investment, or the value of the company, maybe a coin isn't it but I think block chain can work somehow. I guess I have to do the math before I raise any funds obviously, but I'm just trying to imagine a community program funded by the people that have partial ownership in that company. If it takes 100,000 people to raise a $1m, and it takes $500,000 to hire employees and run the company say, the other half of the valuation of company belongs to the 'donaters' the reasons I'm calling them investors is because there is a possibility of a return even it's not the most lucrative investment. But if 200,000 people contributing monthly are now valuing the company at $2m then the early adopters have made their initial investment back, and as more people subscribe the more the company can thrive in communities and the more wealth early adopters can accumulate. I guess I have to find out what other incentives the 'donator' gets other then a peace of mind of feeding the hungry and shares in the company, I'm thinking of some type of product mailed to them could be more of an incentive. I guess I'm imagining it like a program you opt into as if it were some type of tax, and at the end of each year you can get some type of 'tax return' even if its not your total investment. I feel like there's something here, I just have to work out the economics of it,  because if it is a non-profit the $10 a month subscription (or any donation) would be a write off to the contributor.

[bhadz]

The return they get will be in half of their total investment, or the value of the company, maybe a coin isn't it but I think block chain can work somehow. I guess I have to do the math before I raise any funds obviously, but I'm just trying to imagine a community program funded by the people that have partial ownership in that company. If it takes 100,000 people to raise a $1m, and it takes $500,000 to hire employees and run the company say, the other half of the valuation of company belongs to the 'donaters' the reasons I'm calling them investors is because there is a possibility of a return even it's not the most lucrative investment. But if 200,000 people contributing monthly are now valuing the company at $2m then the early adopters have made their initial investment back, and as more people subscribe the more the company can thrive in communities and the more wealth early adopters can accumulate. I guess I have to find out what other incentives the 'donator' gets other then a peace of mind of feeding the hungry and shares in the company, I'm thinking of some type of product mailed to them could be more of an incentive. I guess I'm imagining it like a program you opt into as if it were some type of tax, and at the end of each year you can get some type of 'tax return' even if its not your total investment. I feel like there's something here, I just have to work out the economics of it,  because if it is a non-profit the $10 a month subscription (or any donation) would be a write off to the contributor.

You have to understand what blockchain is. It's not like a share that you can distribute to your investors base on what you have said. It's where bitcoin and any other coin runs. It's the network for most cryptocurrencies so it's not like an asset or dividend that you can give to those people that's longing to invest or buy a share with what you're trying to discuss here. As I have said, as long as there is no business model and profitable service or product you'll going to offer, it's more of a charity.

[serjent05]

You didn't mention how you're going to do business with your startup. It looks not even a business at all if you're feeding people one meal a day, this looks more of a charity and investors that will put money into your startup will get ownership and how they'll make money from that? there's no clear business model that you're actually doing including the marketing and hiring of employees. Most of things that you have mentioned were all cash-out flow and the only cash in flow is the investors money.

I think he meant to do a charity.
I'd not recommend charity to use ICO as a fundraiser as they have their own costs involved and there's about no use of coins and no use of offering the coins. That sort of charity should come up as a charity that may also take crypto donations. If available, you could also provide your info and ask for donation in Gofundme, which is a better platform to get charity.

I think it is not a charity, He has stated his business plan, and those free foods is probably some marketing promotion such as for every x number of orders, y number of food will be available to feed those who are in need of food.  His plan is somehow sound since the food business is quite a good choice.  It is one of the daily needs of people and with proper marketing and management, there is a huge possibility of success.

You have to understand what blockchain is. It's not like a share that you can distribute to your investors base on what you have said. It's where bitcoin and any other coin runs. It's the network for most cryptocurrencies so it's not like an asset or dividend that you can give to those people that's longing to invest or buy a share with what you're trying to discuss here. As I have said, as long as there is no business model and profitable service or product you'll going to offer, it's more of a charity.

Actually tokens in a blockchain is a good way of determining the share of a person.  You just need to look at the blockchain and you can see the addresses that owns the token and it is quite easy to distribute profits to the holder.

[amos77978]

what I fond find difficult to understand here is.. " what will be the use of the token" ?? there must be some use case for this token..  is the food been giving out for charity purpose? or is this business oriented .. if the token doesn't have a use case.. then it's just another shitcoin that will die in a short period of time..

[ROB18]

That all depends on the project or business you are founding. People will invest on a ICO if it's something they know that it will earn them money. But for a fund raiser? i don't think so. But if it's a business with something with return for the investment like fore say 50% off for every $500 invested in the ICO. which can attract investors especially if the business isn't crypto-related.

[btcdie]

If you want to fund your business with ICO, it's better to prepare a clear project scheme or product that is convincing and promising. I think for now it's better to make a private sale or an IEO on an exchange. almost 100% of projects that run ICO fail for now, because it is no longer the ICO era for several reasons. what the investor sees first is definitely "product" and then reviewing the project, whether it can be profitable or not. before thinking about crowdfunding, you should develop ideas related to your project first.

[SyndicateLabs]

Be careful with your decisions, I've seen a lot of businesses taking advantage of this market to find investors. And after they accomplished their goal, the price of the tokens quickly fell to the ground and no one used it.

[Mulann2]

Ico have already lost the trust of investors long time ago, all the disappointment investors have had to experience in investing in all this project already erased the trust they had, this is why ico's are struggling lately, even you are not helping with your plan either, it seems your token holders will not benefit much from this your plan.

[sayulita]

If you want to fund your business with ICO, it's better to prepare a clear project scheme or product that is convincing and promising. I think for now it's better to make a private sale or an IEO on an exchange. almost 100% of projects that run ICO fail for now, because it is no longer the ICO era for several reasons. what the investor sees first is definitely "product" and then reviewing the project, whether it can be profitable or not. before thinking about crowdfunding, you should develop ideas related to your project first.

Also you should keep in mind that the token should be of use somewhere in your business and won't be just a holding for the investors, think of ethereum network where all the ICO were hosted you could have invested in any ICO all you needed was an ethereum wallet. So think about your business and how can others benefit by purchasing those tokens from you, if you come up with a sound idea then there will be a lot of sound pockets willing to invest in your business Idea and even better there are Pre ICO investors also who offer generous money.

[Dr.Osh]

Ico have already lost the trust of investors long time ago, all the disappointment investors have had to experience in investing in all this project already erased the trust they had, this is why ico's are struggling lately, even you are not helping with your plan either, it seems your token holders will not benefit much from this your plan.

for now, it is very difficult to ensure a very good ICO. even very few percentages can be trusted about ICO. Well, in 2020, I don't know ICO that gets a big profit. only a few IEO are like that, but for ICO, I'm still waiting for its success this year, even though it's quite difficult.

[popeye95]

The idea I have is to set up a collectively funded food bank/food truck that can provide one free meal a day to anyone in the city who needs it (trying to eliminate the hunger problem here in America), to keep contributions and business running, I incentivize the investors/philanthropists by giving them a partial ownership in the business via a token.

This part I still can't understand. Your business, as you called, is actually charity as people donate to your food bank/food truck right? How you keep 'contributions and business running' when you're relying on donation and from that, partial ownership in the business to investors for shares of your business is enough to convince them of profit? Are you going to steal a part of the donation to keep as your profit?

[doctor877]

How will you even get to convince people to invest with you for a charity work and hold a token that doesn't have a worth? It's not the right thing to do. The real cryptocurency is still struggling with getting people to understand how it works and invest. This food charity can be done without a token introduction.

[aioc]

It'sd hard to set up project projects via ICO that is nontech, people would like to see a tech-based project, even teach based project are having a hard time to succeed, and to give you an update, it's hard to get investors to invest in ICO, they are fed upon it, you need an extraordinary project and create a big hype to get the support of investors and the whole community.

[Gibreil]

that depends on what kind of business mechanism that you have taken it for your company.

In ICO what we are looking for is a product and this is the main thing for a company to raise the funds. Investors need a utility to be used by them for something else or generate profit to give the investors the dividend like what already given by some major platforms. They will not invest in something that will waste their time and money.

It's better for you to understand what's the ico https://www.investopedia.com/news/what-ico/

If there is no product! Assume that it will fail. Many traders and investors are already learned in ICO. Today, we are already educated and if we see that it has no products then it is red flag.

That's why, OP should not just think that it is to fund his project. Besides, you must have brilliant core members because it also serves as reference for investors to fund your project.