The Inequity of Cryptocurrency Equity

By: Johanna Grosse

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A disturbing trend seems to be emerging in the area of ICOs (initial coin offering).

If you are wealthy or have mad tech skills and you launch an ICO, you are generally perceived to be brilliant, and it’s entirely possible you’ll raise millions in under a minute. If Brendan Eich can raise $35M in 30 seconds, your chances of some kind of success, at least, are pretty good.

If, however, you are unknown, a non-profit, or don’t have even some basic coding skills (even copying and pasting open source is risky), launching your own ICO may not even be an option. Even if you do launch one, it is highly likely you will be seen as going that route for the sole assumption you tried and failed at getting traditional financing from early stage venture firms. You will also likely have to pay fees to SAAS style sites that do the coding connections to a blockchain for you.

True, concerns of scams and ICOs with no real value backing them are well founded. The best current workaround for that for the up and coming entrepreneur is to lose even more control and capital in the process and ask an ICO advisory firm to back your ICO launch.

There are starting to be some noble insiders highlighting unfair aspects of ICOs. So far these seem to be glossed over with lofty promises of a bright future of democratization, where even “farmers in Idaho” can get in on presales of high-valuation entities at discounted prices, with absolutely no indication as to how exactly that will be accomplished.

It is as if the world is supposed to believe that the inherent nature of blockchain technology itself will automatically create expanded access to both sides of early financing rounds. But cryptocurrency is no longer really new. In VC terms, we are roughly in the middle-of-the-alphabet round of investment (or A-22, whatever your term of choice is). And that democratization is not happening on its own.

If early stage financing and access to capital generally is to expand horizontally across the world, with all the added innovation and social value that it represents, it will require intentional, affirmative effort by those in a position to influence cryptocurrency’s development. While regulation has its role, the best solutions to this inequity will be technologies that make it easier for small entrepreneurs to intuitively create campaigns in a way that also makes it intuitively easy for investors to vet their pitch. Without huge fees.

Johanna Grosse is the Founder and CEO of Hope Mixd SPC, sharing luxurious, fresh-based drink mixers designed from a culinary perspective with as many people as possible — and change the world while doing it.

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