Because of the recent success in inexpensive altcoins, people’s interest in investing in altcoin when during their initial coin offering, or ICO, has risen. In this video, David Hay looks at how ICOs are changing the way companies raise money and some tips for spotting out a successful ICO.
So what is an ICO? Hay explains that, “As a company is growing they need capital and the need money to basically bring their application to fruition. Traditionally when you wanted to raise money you would do a series of rounds of investments and you would approach individuals to invest in your company…However, that process is being disrupted by people crowdfunding money through ICOs.”
The days of private meetings with accredited investors are over. Companies and individuals with great ideas can now take them directly to the public. The crypto world is a great place to raise crowd-funded investing to launch a business. The reason for this is based on the fact that the company has a global audience, uses a common currency, and is able to piggyback off of the platforms already developed.
Hay compares investing in ICOs to gold mining in California in 1849. Only 1% of the people in the United States left their home to mine for gold in California: Hay compares these people to the people who are investing in cryptocurrencies. He goes on to say that of the 1% who made it to California to mine for gold only 1% of them made a huge profit from their efforts: Hay compares these people to the ones who invest in ICOs. The ones who make the largest gains are the ones who are willing to make risk and work hard.
Hay stresses the importance of doing your own research before throwing your money at an ICO and hoping that it will grow. Hay goes on to advice that you should only invest the money you are willing to lose.