Corporate ICOs Are Coming
In my last post in December, I made the point that the vast majority of ICOs were extremely risky and unlikely to result in real businesses underlying the associated blockchain and token. Specifically, I raised the following requirements for the tokens to have real value:
1. The technology has to be built (vast majority of these are issued via whitepapers)
2. The technology has to be launched into the wild.
3. Nodes and network participants need to get online
4. Ultimate end users need to adopt the product offering. Often switching from existing incumbents who already enjoy network effects and moats.
5. The holding company needs to have enough cash on hand or be profitable enough with user adoption to continue to operate as an ongoing concern.
For a startup company, even a well funded one, steps 4 and 5 can be particularly hard. But if an existing company, one with a national brand, a capable and larger team, and cash flow, offered a new token, the odds of success rise considerably.