Are Blockchain Startups A Good Investment Choice?
Should a business idea suffer because it cannot accumulate enough capital? Well, that’s not a question that has one answer. Is there a reason why the business can’t raise capital? Surely an investment bank and venture capitalists would be willing to give a startup the funds it needs if the idea, planning and people running the show were of sound quality right? Maybe they’re asking for too much, to begin with, and rushing into things? Could the plan of early expansion just be too ambitious, to begin with?
All of these questions of relevance and need to be looked at as to why some startups just can’t seem to raise the money they need to get off the ground. The incredible change in the business world has come about because of cryptocurrencies. Now, rather than relying on the traditional ways of earning investment, startups can offer slices of their business’ market value even before it has opened its door to the public and begun selling. To some people, it sounds like a game of cowboys and Indians, because you don’t know who the bad guys are, i.e. pulling the wool over your eyes to get your money.
Investment trust still applies
Just because investments in a startup relying on cryptocurrency as it’s capital, doesn’t mean that you’re in a different world. In fact, the same traditional rules of trust in the business and the people still apply. The only thing different is the way in which you invest, but you should still be looking out for the same markers you normally would. First and foremost, do you trust the people running the business? Could you see yourself having a great relationship with them at least five years on from now?
Their temperament and determination to succeed and be unique in the marketplace are values you should be questioning them about. Have they stated a problem that they see and a clear solution to it? If they can’t give you a clear explanation of why and what they hope to achieve in the time it takes you to start and stop your elevator ride, then they’re no good. Do they have an initial business plan? What will their targets and focus be for the next 6 to 12 months?
The new investor’s choice
Rather than going out to investors for capital, startups can now rely on the ICO process. An ICO is an initial coin offering that is designed to raise funds to be used in cryptocurrency ventures. If you read how to buy into an ico blockchain startup, you can see that the process is simple once you have a grasp of the basics. First, you need to get familiar with encryptions, exchanges, fees and wallets. Then as an investor, you can buy tokens using a supported wallet by the startup.
Depending on the amount of your coins, you’ll be allocated a certain amount of tokens. An incentive to buy into an ICO is because the price of the cryptocoins will be less than when they become available to the market. Once people start to buy them and the cryptocurrency gets media exposure, the price can go up by 3 to 10 times the amount of the ICO.
It’s becoming a trend for businesses to start their own cryptocurrency in order to raise capital. Rather than going in search of traditional investment routes, they can simply offer the value of their business to anyone that believes in their startup idea.