ICO
Many IT startups need funding for their development. To attract investors, special platforms are being created where both parties can get what they need: companies can get money to develop their ideas, and investors can get a return on their investments in startups.
What is an ICO?
A form of attracting investments in the form of selling a fixed number of new cryptocurrency units to investors, obtained by a one-time or fixed generation. As a rule, ICOs are not subject to state regulation, although some countries are trying to do so or limit the processes provided for by this form.
When it comes to cryptocurrency, investors are replacing its more liquid types with new ones. At the same time, depending on the conditions, investors can receive coins without dividends and participation in the company's future profits. Also, tokens from future profits.
The main advantages and risks of ICO
The advantage is the ability to place tokens to any individual or legal entity. At the same time, there are no audits. There is also no need to submit official reports, so this method of attracting investment is very attractive for IT companies.
The threshold for entering the system is minimal, and the project provides for complete anonymity. Other parties to the transaction and tax authorities will not know about your investment in the startup. Moreover, there have been cases when the returns on such investments due to the rapid growth of the token price amounted to hundreds or even thousands of percent per annum.
The lack of legislative regulation may entail certain risks. Before investing your own savings, you should consider some points:
- the management of the company to which the investor is going to make a contribution must have an impeccable reputation and considerable experience in this area;
- the startup must be officially registered as a legal entity;
- the idea of the startup must be clear, valuable for future users and have prospects;
- you need to carefully and thoroughly familiarize yourself with all the rules of the future deal. Companies place them on the project website in the form of a public offer;
- there should be a competent project presentation with a clear description of the technical and marketing details of the startup;
- there should be a description of the project development stages and their compliance by the startup;
- it is important to have an account that provides for the transfer of funds to the startup only when the company fulfills its obligations.
Studying the project on all these points will help to avoid fraudulent schemes.
ICO regulation in Ukraine
Currently, ISO is not regulated in any country in the world. In Ukraine, the adoption of a law on the creation of a regulatory space will make it possible to use ICOs to attract resources for the development of innovative technologies. The introduction of the concept of a token asset into legal circulation will create a legal space in Ukraine for tokenization, the transfer of rights to an asset into a digital token on a blockchain. Moving physical assets in the blockchain allows you to use the capabilities of this technology while maintaining the characteristics of the asset.
ICO stages and process
The process includes the following steps:
- Preliminary acquaintance - the company makes a presentation of its project and assesses the interest of potential investors in investing. This is done by posting news, press releases on websites and forums.
- Resale - usually, such events are not actively advertised like the main sales. tokens are sold at discounted prices. The proceeds can be used to increase investments, finalize the logo, etc.
- An offer is a detailed proposal for investors. It contains a technical description of the idea, implementation timeframe, required investment amount, etc.
- Marketing campaign - informs the largest number of potential investors, increases the value of the project by advertising future benefits.
- Sale launch is the final stage. Tokens are sold on the company's website or cryptocurrency exchanges.
Each stage is important for the successful progress of the project.
Criteria for choosing an ICO
Before making your choice, you should analyze it according to several criteria:
- the level of demand for the project;
- clarity of goals;
- budget transparency;
- prospects of tokens;
- concept;
- level of professionalism of the team;
- project value.
It is worth going through each point to understand whether it is worth investing in a particular project.
Popular ICOs in Ukraine
Currently, there are many startups that are worthy of attention and may be promising. The most popular ones are:
- FightOut ;
- The mission of C+Charge;
- Securedverse;
- RobotEra;
- ALTSIGNAL;
- Vivi;
- Pawā;
- Brikn.
These companies have been identified as reliable, proven and profitable projects.
ICO development forecasts
The crypto community has a clear understanding that ICOs cannot exist for long in the form they are currently in and must undergo a transformation. Already, most of the adherents aimed at creating Security Token Offerings are changing their thinking and preparing to create STO companies.