Future of Crowdfunding from ICO for Startups

With changing times, getting loans from banks is becoming more and more difficult for businesses. Especially if you are planning to start a new business there are quite a few options left for you to get the funds arranged.

Well, as a startup you can use traditional fundraising methods such as equity crowdfunding. This is a method by which you can easily raise the funds for your new business by contacting the individuals such as your friends, relatives, or others who are interested in backing up your project for mutual benefits.

ICO is a new technology that is now becoming more popular among businesses and investors. Although it works in a similar fashion to a crowdfunding campaign, the benefits offered by it are comparatively higher.

According to most of the investors, investing in an ICO can prove to be very profitable as the returns can be much larger. But researching and knowing the truth is always recommended before you plan to go ahead.

Crowdfunding from ICO

Based on MarketSpots reports ICO or Initial Coin Offering is today one of the best ways by which venture capitalists can raise the required capital for their business without going through a regulated process which is most of the time full of hassles and time consuming.

In other words, it is a simple way for new cryptocurrencies by which they can raise the initial capital required to launch a token or a coin. Three types of popular ICO tokens are: Equity Token, Utility Token and Securities Token. Based on the business and projects ICO registration can be done by startups.

On one hand, where startups can get the help of services for creating their own ICO; investors on the other hand can successfully invest in these offerings for getting much higher returns on their investments in comparison to IPO or other crowdfunding options.

Investors who decide to invest in the token can earn higher returns on their investments which are mostly made by releasing the basic cryptocurrencies (like Bitcoin and Ethereum) exchanged with new ICOs.

Token supply for public/investors is usually static and predetermined based on various factors such as goal for ICO-funded projects, price of tokens, etc.

Is It Safe?

The idea of ICO is very much similar to that of IPO or initial public offering where the capital is raised by distributing the shares of the company to the public.

Due to increasing ICO marketing, its popularity and ease of investing more and more people are now seeing this as a brightest opportunity for investment globally.

The main benefit offered by ICO is its faster transactions where both, investors as well as startups, can achieve their objectives very fast.

Due to increasing scams and possible frauds in the field, startups or cryptocurrency businesses are required to provide complete details (through white papers and their websites) about their projects and their strategies about how the new ICO will going to work and benefit the investors.

At present investing in ICOs is completely legal in most of the developed countries like US. However many countries (like China and Korea) have recently banned them due to their unregulated nature.

But businesses and people all around the world are confident that it will be soon brought under the strict financial regulations and laws of these countries making these ICOs much more valuable than ever before.