Changpeng Zhao, the CEO of the Binance digital currency trading platform, said in an article on May 7 that initial coin offerings (ICOs) are much better than venture capital funds, even with a high risk of losing money. 'failure.
In a blog post titled "ICOs - not just" good to have, "but necessary," Zhao expressed support for ICOs claiming they are "100 times easier" to raise funds than traditional VCs:
"Through my own experience, and looking at hundreds of other projects remotely, I would say that fundraising through country offices is about 100 times easier than through traditional VCs, if not more . With the ease of raising funds that has grown, the logic is that there could be 100 times more startups, well funded, where ICOs are allowed. "
Zhao said that while some venture capitalists are true experts in their field, the vast majority of "VC professionals" have no idea of the projects or areas in which they invest. According to Zhao, there is a notable lack of start-up experience and insufficient understanding of project technologies.
Zhao admitted that the ICO market is in its infancy and therefore faces problems, including scams and failures. He still believes that "in comparison to traditional venture capital projects," more ICO projects will succeed. "He wrote:
"Most ACIs are new startup projects, and have a high failure rate, just like in traditional startups. This is not new. Most ICO investors already know that. Investors in ICO are early adopters (and learners). "
Zhao concluded by mentioning that many VC groups are now investing in country offices. He argues that VC groups "have their noses on money", adding that they are more "agile" than other major organizations that are responsible for public wealth; "The fastest actions will reap exponential benefits. "
Cointelegraph previously reported that the US venture capital firm Sequoia sued Changpeng Zhao for alleged violation of an exclusive deal during the negotiations of an investment contract. The deal was for $ 80 million and 11% in Binance, which broke down last year.
