The ICO has been hailed as the new IPO, offering a more egalitarian way to raise funds. The fact that this public sale brings in millions of extra dollars and creates an active community since the first day does not shock too. In 2017, the initial supply of money was the model that venture capitalists envisioned. The year 2018 began in the same way, with a public crowding ICO enthusiastically. On paper, January's results look very impressive, including millions of dollars raised in record time, but the process has now changed. In many cases, the public sale is more like a posteriori reflection than a main event as the ICOs look like the name of the IPOs in every way.
From IPOs to ICOs and vice versa
From Legolas to Blockport and from Storecoin to Celsius, many notable Token projects this year either cancel or skimp on their public sale. The initial currency offers were seen as an ideal way to start startups and integrate a large community from the beginning. However, these benefits have had to be tempered by the disadvantages of having to deal with a group of investors who are more impatient and less demanding on technology. Going from groups of participants in public marketing projects spammering on Telegram groups to the meme "When the exchange", to the novices in the throes of blatant phishing attempts and demanding more regulation, opening your project to the public is not not without clutter.
Even when the general public is on its best day, there is still the watchful eye of the regulators to appease. In 2017, it was widely accepted that giving the 'utilitarian' label to your tokens was enough to avoid the clutches of the SEC and their international counterparts. In 2018, this is no longer the case. Given the risks associated with offering potentially secure tokens to non-accredited investors, a number of important crypto-startups have decided to purely and simply avoid corporate investors. These include the Polymath platform, the product of which, by its nature, only requires a private sale.
Public offers held behind closed doors
Crypto-startups face a dilemma: they must capture the public's interest to ensure their future success, but they do not want to expose themselves to the risks that this brings. Of the ICOs that organized a public sale this year, the majority conducted thorough KYC and ALM processes. Logolas, for example, who only accepted contributions in Bitcoins only, required participants to disclose detailed information about their funds, stating "Please provide as much detail as possible about the origin of the BTC ."
The founder of Essentia.one believes that the transition from public sales to private sales is inevitable, according to News.Bitcoin.com: "Startups seek to establish long-term partnerships with investors who can provide something beyond the capital . This could be an expertise, lending its experience to the project, or simply connections to exchanges, platforms and incubators in the crypto space. As a result of this trend, we are seeing more Tokens sold privately or pre-sold, which means that there is a means available to the general public. "
This corresponds to the investment policy aligned by startups like Metahash, a high speed blockchain that will be launched later this year. Her private sale is looking for "experts who are willing to participate in the discussion of the project before its public launch and, if possible, join the hashtag # MetaHashTeam." She continues saying "We are not interested in the amount (of ETH) but rather by your expertise. We want experts in different fields who participate in our Private Round. "
A trader tweet complaining: "At present, this is the allocation of land to the best ICO, with increasing percentages for pre-sales and private sales ... This means smaller capital for most investors, especially when they are limited to public sales. "The public may have fueled the ICO phenomenon, but as current trends continue, the next wave of public sales will occur without the public.