How Blockchain Startups are Reacting

The hype that led investors to back early concept-stage ICOs was rooted in a belief that a blockchain-based technologies would become a platform for the next generation of computing, and one whose widespread adoption would create billions and billions of dollars in value. Cryptocurrency commentator John Gabriel captured

this sentiment well in the early days of the now record-setting EOS $4.1 billion ICO: “EOS is an unproven platform. The team behind it is quite capable and reputable… but EOS remains a promise. The infrastructure is still being developed and until we can experience the great promise, it is best to practice a wait-and-see approach. For the risk takers, this is a perfect opportunity to be part of the early stages of a cryptocurrency which even though quite risky, hold great promise of mega profits.”

While an expectation for evidence of product-market fit means that the time of the large concept-stage ICO has passed, but what was the case before, and will remain the case going forward, is that a belief of eventual mass adoption is critical to successfully raising capital. Aside from setting smaller funding targets, one notable emerging strategy is: building a proof of concept, then offering the solution’s initial tokens only to those who participate in its early usage, then a smaller private ICO to strategic investors, and finally a public ICO to the broader population of blockchain investors.

This is a thing of beauty because when the public offering eventually takes place, demand has already been demonstrated, questions about functionality have been resolved, and the token price, along with the likelihood of success, is substantially higher as a result.