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ICOs are more akin to angel/VC rounds than IPOs - you often invest in a idea thats still not fully developed and might need 1-2 years to come out on the market.

by velcro 9y ago

ICOs are more akin to angel/VC rounds than IPOs - you often invest in a idea thats still not fully developed and might need 1-2 years to come out on the market. The huge difference to traditional investing is that shares/tokens are immediately tradable and small(ish) crypto investors have 0 patience to wait those 1-2 years so they often sell early and crash the price to go looking for another get-rich scheme. Thats a curse of the ICOs - but also a benefit. As an investor you get to assign value to something immediately and have the freedom to terminate your investment (something very difficult with traditional angel/VC rounds) and sell the tokens. Its also a fascinating marketing strategy - some of your crypto "investors" are early adopters, promoters and users of your tech - even more so because they're vested in it. I'm not defending the ICOs (especially the over the top ones) - but lately there are so many articles that don't really try to understand the concept. And so many people automatically equating temporary loss of value with scams. Internet and cryptos are moving at the speed of thought - but the rules are still the same - startups need time. In all fairness - Bancor is still a very young project. Also a fairly promising one - many projects already using it: https://www.reddit.com/r/Bancor/comments/75b7us/list_of_all_known_projects_committed_to_using/ https://www.reddit.com/r/Bancor/comments/75b7us/list_of_all_...

the_stc 9y ago
Very few ICOs do right by investors. We're one of the few offering equity positions and dividends. The law conveniently provides an excuse to them, see Tezos even outright calling it a donation! As an EJC the laws don't apply in the same way, so we directly offer shares in our startup. Few ICOs are willing to do the ethical thing because they're just cash grabs. Hire a small team to try to make your whitepaper vision into code. If it fails and you were not too far fetch in using company funds, nothing bad will happen to you. It's disgusting.
- velcro 9y ago
  You could say the same thing about "traditional" startups though - investors often invest just based on the combination of the idea, founders/team and maybe an early prototype. If the startup fails - nothing "bad" will happen to you either. Shares in a startup thats not publicly tradable don't really offer you that much security. Unless you've committed fraud - but - I've been following the ICO market closely for the past 6 months and I can't remember any of the larger ICOs that were outright scams. Many people and smaller projects/websites will of course try to scam you online - but you should always do your own research and due diligence still applies. I'm not sure I'd agree that "very few ICOs do right by their investors". It depends what you mean - there have been many successful projects out there that made people money. But if you mean "flipping" i.e. buying into a ICO just to try and sell it quickly for profit - that seems more difficult these days. But it might also be due to the current BTC rally. ICOs are of course still in wild west territory as far as regulations go - there is a reason why Tezos calls it a donation. They don't want the regulatory hurdle. In fact almost all ICOs these days force you to accept that tokens are not shares in the company and don't "officially" entitle you to anything.
  - nsomaru 9y ago
    Have you compiled your thoughts on ICOs?
    - velcro 9y ago
      No. I was doing a lot of research into ICOs over the summer, but its incredibly time consuming and there are so many now. I spend too much time behind the screen as it - need to live in the "real" world every once in a while - I'm trying to quit :) Will try putting my money on autopilot/fund for a while.
  - jmkni 9y ago
    There's an ICO scam tracker here - https://etherscamdb.info/scams/ https://etherscamdb.info/scams/ There seems to have been quite a few.
    - velcro 9y ago
      Note that this is a database of fake phishing websites that impersonate legit projects (and try to steal your money) - its not a database of scamy ICOs. As mentioned - there are certainly those too - but I don't remember any with bigger/reputable projects lately.
frakr 9y ago
Or pink sheet stock trading. Watch the film Boiler Room. http://www.investopedia.com/terms/p/pinksheets.asp http://www.investopedia.com/terms/p/pinksheets.asp
vosper 9y ago
They're angel "investing" in the sense that none will be around in 2 years. That's about the only connection to angel investing these scams have.

by velcro 9y ago

the_stc 9y ago

Very few ICOs do right by investors. We're one of the few offering equity positions and dividends. The law conveniently provides an excuse to them, see Tezos even outright calling it a donation! As an EJC the laws don't apply in the same way, so we directly offer shares in our startup. Few ICOs are willing to do the ethical thing because they're just cash grabs. Hire a small team to try to make your whitepaper vision into code. If it fails and you were not too far fetch in using company funds, nothing bad will happen to you. It's disgusting.

velcro 9y ago
You could say the same thing about "traditional" startups though - investors often invest just based on the combination of the idea, founders/team and maybe an early prototype. If the startup fails - nothing "bad" will happen to you either. Shares in a startup thats not publicly tradable don't really offer you that much security. Unless you've committed fraud - but - I've been following the ICO market closely for the past 6 months and I can't remember any of the larger ICOs that were outright scams. Many people and smaller projects/websites will of course try to scam you online - but you should always do your own research and due diligence still applies. I'm not sure I'd agree that "very few ICOs do right by their investors". It depends what you mean - there have been many successful projects out there that made people money. But if you mean "flipping" i.e. buying into a ICO just to try and sell it quickly for profit - that seems more difficult these days. But it might also be due to the current BTC rally. ICOs are of course still in wild west territory as far as regulations go - there is a reason why Tezos calls it a donation. They don't want the regulatory hurdle. In fact almost all ICOs these days force you to accept that tokens are not shares in the company and don't "officially" entitle you to anything.
- nsomaru 9y ago
  Have you compiled your thoughts on ICOs?
  - velcro 9y ago
    No. I was doing a lot of research into ICOs over the summer, but its incredibly time consuming and there are so many now. I spend too much time behind the screen as it - need to live in the "real" world every once in a while - I'm trying to quit :) Will try putting my money on autopilot/fund for a while.
- jmkni 9y ago
  There's an ICO scam tracker here - https://etherscamdb.info/scams/ https://etherscamdb.info/scams/ There seems to have been quite a few.
  - velcro 9y ago
    Note that this is a database of fake phishing websites that impersonate legit projects (and try to steal your money) - its not a database of scamy ICOs. As mentioned - there are certainly those too - but I don't remember any with bigger/reputable projects lately.

frakr 9y ago

Or pink sheet stock trading. Watch the film Boiler Room. http://www.investopedia.com/terms/p/pinksheets.asp http://www.investopedia.com/terms/p/pinksheets.asp

vosper 9y ago

They're angel "investing" in the sense that none will be around in 2 years. That's about the only connection to angel investing these scams have.