Evolving ICO Ecosystem and funding

The world of ICO’s and Series A is converging as more deals happen in the ICO space.  This is shown has by the fact that the median ICO size is becoming closer to that of a traditional Series A raise amount.

series_a_vs_ico

Source: http://tomtunguz.com/ico-trends/

Series A Funding rounds

By definition Series A is typically the first round of capital from Venture Capitalists.

Traditionally startups have to achieve significant traction (usually revenue) before institutional investors will invest and therefore it is a significant mile stone for startups that want to achieve high growth rates and put them on a path to more institutional funding rounds.

Series A funding often also comes with a new share class that gives Venture Capitalists more rights vs ordinary shares.

ICO Funding

In ICO funding there is no equity sale and therefore it is not directly correlated to Series A funding but it has become closely related based on the fact that the funding amounts are close and the businesses are early stage.

The ICO world is changing so quickly though it would be a mistake to put ICO funding as for only early stage startups, as more businesses are turning to token sales and even listed companies have started to get into ICO’s. An example of this would be Naga a listed Frankfurt business.

We believe the  ICO space will evolve and more and more later stage businesses will turn to token sales to raise capital.

A growing ICO market

Number of ICO vs Series A

Source: http://tomtunguz.com/ico-trends/

It is still early and you can see that the number of successful ICO’s is growing rapidly. There will be a maturing of this market as professionals and mature businesses become more involved in the ICO space.

How much can you raise for your ICO?

As of the end of 2017 the raising of capital has become more difficult due mainly to legislation in China and Korea. Due to this the huge funding rounds that happened in the mid 2017 market have largely disappeared.

Currently $30m raise is considered to be on the large size. When comparing this to a Series A round this would be a large funding round, however a Series B funding round is probably more in line.

 

 

 

 

One thought on “Evolving ICO Ecosystem and funding

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