ICOs – Not Just “Good-to-Have,” But Necessary – says CZ, the CEO of Binance.
Changpeng Zhao, the CEO of digital currency trading platform Binance, said that initial coin offerings (ICO) perform far better than venture capital funds (VCs), even with a high risk of failure.
In a blog entry titled “ICOs — Not Just ‘Great to-Have,’ But Necessary,” Zhao communicated his help for ICOs guaranteeing they are “100 times simpler” for fund-raising than conventional VCs:
“Through my own experience, and watching hundreds of other projects at a close distance, I would say raising money through ICOs is about 100 times easier than through traditional VCs, if not more. With the ease of raising money increased, logic says there may be 100 times more startups, well-funded startups, where ICOs are allowed.”
Zhao said that while some VC investors are experts in their own field, the great majority of “professional VCs” have “no clue” about the projects or fields they invest in. According to Zhao there is a notable absence of startup experience and insufficient understanding of projects’ technologies.
Zhao admitted that the ICO market is in its early days and therefore is encountering problems, including scams and failures. He still believes that “compared to ‘traditional VC invested projects,’ a larger ratio of ICO projects will succeed.” He wrote:
“Most ICOs are new startup projects, and have a high rate of failure, just like in traditional startups. This is nothing new. Most ICO investors already know this. ICO investors are early adopters (and learners).”
Zhao concluded by mentioning that many VC groups are now investing in ICOs. He said that VC groups “have their nose on the money”, adding that they are more nimble than other large organizations which are responsible for public wealth.