Why the Timing Might Not Be Right for an Initial Coin Offering to Fund Your Business
All over the financial newspapers, you are likely to find stories about businesses, and those who run them that have done very well by incorporating some form of cryptocurrency into their operations. In particular, many of these startup companies have benefited from an initial coin offering, or ICO, in which they issue digital coins to their investors in exchange for seed capital. If you are planning a new business and are looking to raise some money to get underway, the idea of using an ICO yourself to do it might seem enticing. But it’s not as easy as these big winners in the news might make it seem. And the timing might not be right to jump in either.
Throughout history, whenever something enjoys an incredibly successful rise in a very short time, there is inevitably a backlash that pushes back against this entity and knocks it back somewhat. This seems to be the trajectory that the various forms of cryptocurrencies are taking. In the middle of last year, all of the news seemed to be rosy, what with the values of the various coins skyrocketing and making early investors rich. Big companies announced plans to incorporate blockchain technology, which is what drives cryptocurrency, into their operations as well. But the last few months have been rocky, with everything from governments to banks pushing back with extreme force.
This has made cryptocurrency investing a bit of an unpredictable game, which is why getting some digital assistance from Ethereum Code to trade coins is an excellent idea. As for business owners, now is the time to tread carefully with a potential ICO.
When cryptocurrencies were really hitting their stride last year and were garnering nothing but positive attention in the news, many investors wanted to get involved with ICO’s practically sight unseen. But as coin values have leveled off somewhat and some of the cryptocurrency news has skewed toward the skeptical, many investors have backed off from investing without a solid idea of the company putting out the coins.
A Great Plan
What that means for those considering an ICO is that they must have an extremely good plan in place that will draw in wary investors. This means that you’ll have to have an idea that truly sets your company apart, which is becoming an increasingly difficult feat in the crowded world of cryptocurrency.
Companies who are relying on an initial coin offering to fund their business might be left wanting if the coin sale doesn’t go as planned. If you are starting up a business, it might be best to initially rely on traditional forms of raising money, such as angel investors, to open the doors. Down the road, you can still hold an ICO, at which point it won’t be so integral to the business.
The ICO market is changing drastically all the time. Make sure you do your research on it and keep up to date with trends before making one of these offerings the backbone of your business-funding plans.
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