Enterprise Startups Are the ICO 2.0

Enterprise Startups Are the ICO 2.0

In 2018 alone, ICO projects have raised $13.7 Bn, nearly doubling the amount raised in 2017, but research conducted by a small team at Boston College in Massachusetts showed that “only 44.2 percent of token projects are active into the fifth month or beyond, using their social footprint via Twitter as a barometer of health.”

Cryptocurrencies by # of Twitter Followers and MarketCap
Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3182169

The ICO “death barometer” further showed the following:

Breaking it down by category, 83% of the 694 ICOs that don’t report capital and don’t list on an exchange are inactive after 120 days. For the 420 ICOs that raise some capital but don’t list, this figure falls to 52%, and for the 440 ICOs that list on an exchange, only 16% are inactive in the fifth month.

This is no longer surprising for those in the crypto and blockchain community. We already know the ravine towards where most ICOs are heading due to a methodology which almost all follow – a matter of their TOKENOMICS not being clarified.

But wait, in this gloom, there’s a light. From the report cited in the Forbes article, the least successful ICOs were the cryptocurrencies but the most popular industries with the largest number of projects – finance, gaming, and infrastructure – persisted. Indeed, “something truly spectacular is taking place that could change finance, investment, and entrepreneurial innovation forever”.

The success leaders cited by the report were service and utility tokens, or protocol assets not designed for monetary exchange but rather assets backed by new services that exist apart from their fundraising potential. Well, for many months, I kept shouting at the top of my voice that the next wave of successful ICOs would be from the “enterprise” class, the ones which will be successful in bull and bear, no matter what.

I was asked what I meant by “enterprise” class. Well, it’s simple.

  • Real people with real experience
  • Real company with real offices
  • Real team with real full-time hands-on effort
  • Real money from the founder, as much as from the private investors
  • Real product, not just coded in GitHub, but live, with users, a live community, not today, but for many years.
  • Real revenues already coming in, month after month, not just a loss-making-forever-trillion-dollar-opportunity.

This has the “trust” and “security” of an “STO” but hassle-free, flexible, low relative fundraising expenses of an “ICO”, with a very balanced “growth driven” direction and objective from people who “finally” make sense.

The bottom line for us in the crypto market is that our confidence is based not on the high flying coins but on deep conviction concerning the technology itself and what it can do for the well-being of the human experience.

Do you agree with the premise that enterprise-class startups will be the next generation of ICOs? Let us know in the comments below.

Images courtesy of SSRN.com, DepositPhotos


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