"Insider" ICOs are now becoming a trend... are VCs becoming "first class investors"?

in crypto-news •  8 years ago  (edited)

Insider ICOs

Apparently VCs now can get in on crowdsales with dramatic discounts. We actually see this for example with the Tezos ICO. This is very problematic because it seems to defeat the whole purpose of crowd funding. Again, another reason not to do the ICO as it's not really very fair, whether it's the "insta-ICO" or the "insider-ICO", in either case the little investors get to pay more.

I get it, the developers need to get funded. Perhaps we would be better suited by focusing on making better development tools so as to lower the cost of development so that it doesn't cost tens of million s of dollars? And in situations where it does cost tens of millions of dollars maybe figure out the most fair way possible for initial distribution?

I am questioning the value VC's bring to the table compared to actual investors that will not only use a product but can provide much more valuable feedback because VC's are often disconnected from reality and the markets they invest in.

References

  1. https://www.reddit.com/r/ethtrader/comments/6apk8z/opinion_early_access_discount_for_vcs_stands_to/
Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

I don't think Tezos offers any discounts. Tim Draper invested in company which creates Tezos but not ICO itself I believe.

https://steemit.com/cryptocurrency/@dawidrams/why-i-believe-that-investing-in-ico-crowdfunds-is-a-no-brainer-hot-ico-s-right-now

True that he invested in the Tezos companh itself. Also from the article:
He (Tim Draper) told Reuters in an interview he will for the first time participate in a so-called "initial coin offering" of Tezos slated later this month.
http://www.cnbc.com/2017/05/05/billionaire-investor-tim-draper-backs-new-cryptocurrency.html

Other than the upcoming Tezos, any other ICOs you've come across backed by venture capitalists?

may be the crypto community need to go back in time and do it satoshi style. Similar to ohad with tau chain. the tokens are there you buy if you believe in the project,

Really vexing issue. The developers need to be paid, upfront. Who fronts the money for that?

Seems to be several ways.

  1. pre-mine. Mine a coin for a period before opening up to others.
  2. stealth-mine. Open up to all, but leave a residual advantage to the people who built it, who can get ahead and build up the warchest.
  3. Founder's reserve. Do the token issue but carve out a mandated / coded part of the emission to a Founder's
  4. Founding company with VC money. Raise money on a proposal, pay for it, then use the corporation's inside advantage to build or mine or something.

They all have disadvantages.