ICOs have been experiencing a bear cycle but investor appetite still remains, albeit with much more caution and selection. Investors are better at understanding the fundamentals of risk vs reward when compared to a year ago.
In my dealings, I have found VCТs are only investing in projects that have committed prototypes, clients, or†revenue from existing companies. So what does this mean? Projects can still benefit from an ICO, however it comes with compromise. Some reformed options are to either do a small fundraising round without giving up too much, then complete a future raise at a higher valuation.
Another is to fund internally, develop a prototype, gain some users then seek external funding. Whichever the option, projects need to take responsibility in order to restore investor trust. This is why the STO model is so appealing. It enforces responsibility. Partnerships and user adoption have never been so important, so projects need to be coy in how they approach a token generated event. As always the appropriate care and advice needs to be taken before considering any fundraise.
Looking ahead at market conditions, it is important to monitor how the space is developing at a regulatory and infrastructural level. The outcomes of these will have a great impact to the ICO market within the next 12 months.