A traditional practice among startups to raise money is from venture capital or seed funds. They also ask for money from banks, or get funds via crowdfunding. However, the recent trend is to get funds from Initial Coin Offerings which is an offspring of blockchain technology.
Here instead of issuing equity, debt or perks, entrepreneurs launch a virtual currency, in the form of a coin or token which can later on be cashed in by the owner.
Smart Way to Receive Funding for Venture
It is but quite obvious to go for easiest way to receive funds for running a company. In this pursuit, ICOs can be extremely great a solution. With ICOs you can skirt normal financial regulation and reach directly to investors. These can truly be called a cross between crowdfunding and a conventional equity IPO.
ICOs are future of finance as they heralding an entirely new way to raise funds for any startup. Additionally, the system is not just helping the companies but also ordinary citizens to spend their money in a company that can generate wealth for them in future.
Win-Win Situation for Investors and Startups
ICOs are helping startups and even companies raise their capital and their sales to great extent. Additionally, the growth of blockchain-based financing in the form Initial Coin Offering raises the possibility that investing in startups may become easier and democratic.
This will definitely be a great era for new kind of financial management. In such a win-win situation where ICO system is working profoundly it appears quite clear that there is great prospect for inclusive investment opportunities.
Though ICOs are little bit technical to understand for a lot of investors, they are now being simplified to help the new people to understand and invest in the financial technology product.