Principles of Finance II: Innovative Capital Sourcing - The Tale of ICOs

Innovative Capital Sourcing: The Tale of ICOs
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September 7, 2017
One of the most noticeable changes within this decade has been the ever-increasing number of startup companies hoping to be the “next-big thing”. Perhaps, some of the biggest reasons for this increase is the quick advancement of technology and sources of possible capital, as compared to previous generations when finding the right venture capitalist could be daunting due to the immense amount of paperwork and limited opportunities. Today, companies like Indiegogo and GoFundMe provides the opportunity for groups and individuals to achieve their dreams of creating their new products, in exchange for equity or even discounts (for those who contributes) once the products get released. Aside from this, the advent of virtual currencies or “cryptocurrencies” have also paved the way for other innovative means, not only for purchasing but also for funding. This year, funding methods such as Initial Coin Offerings (ICOs) has also hit the market. According to Mann (2017), so far in 2017, about 295$ million has already been raised by companies all over the world through ICOs. In relation to my startup company, I would most likely utilize both crowdfunding and ICOs in order to raise capital to make my business happen. By utilizing both of these methods, I would be able to raise capital in terms of traditional cash or notes (through crowdfunding) as well as ...