2 The ability to maintain strategic control over the venture 2 The empowerment, through a digital financing mechanism, of disenfranchised entrepreneurs who are geographically displaced or lacking the network and resources to fundraise on their own While the benefits are intriguing, an ICO is not for every startup. There must be a tokenizable aspect of the business model that provides some form of utility to the token holders. Aspects of new, innovative business models which can be tokenized include services rendered, access to exclusive content, enhanced community engagement or even profit-sharing rights in some instances. Startups should be encouraged to deepdive into their business models and assess if tokenization makes sense, then explore an ICO in parallel with traditional financing methods.
While the benefits are intriguing, an ICO is not for every startup. There must be a tokenizable aspect of the business model that provides some form of utility to the token holders.
Many startup management teams are skeptical of the ICO markets; scams and fraudulent ICOs have burned crowdsale participants in the past year. At Iconiq Lab, the overwhelming skeptical feedback we receive from startup applicants to our ICO accelerator program is they do not wish to be seen as potential scams or money-grabs, such as other â€œprojectsâ€?. This is encouraging for us to hear, as viable, sustainable business models are beginning to explore this space and adopt tokens as a financing instrument. Coupling this mentality towards responsible fundraising through ICOs with the inevitable regulation of the crypto markets, we at Iconiq Lab are bullish on the ability of tokens to disrupt equity as the primary means of financing for early-stage companies, and the long-term sustainability of the crypto markets. 53
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