Fundraising in the blockchain space
Fundraising in the blockchain space started initially as ICOs – initial coin offering.
After a boom in 2017-2018 it disappeared for a while. It came back in the form of IDOs – initial DEX offerings. These days it expanded to INO – initial NFT offering, IMO – initial Metaverse offering, IGO – initial Gaming offering, IEO – initial Exchange offering and so on.
The methods of fundraising have changed as well. In the past it was pure tokens in return for investment. While that is still a popular option, currently some blockchain companies are raising in Equity or a mix of Equity and Tokens or through the sale of NFT’s or a mix of NFT’s and tokens and even land and property sales.
Another sector that flourished is the launchpads space. These launchpads help projects raise money from the public/retail user and build awareness and hype for the project. Hundreds of launchpads have popped all over like mushrooms after rain. Every chain now has a few launchpads on it as well as some specific to gaming or Metaverse or generalists.
Another tool that has become popular for fundraising is fair launch with projects like Copper launch where the project puts their token and starts at a high price and the retail buyers decide what is the right market price/value of projects and at what price they want to buy the project tokens.Top projects like Merit Circle guild managed to raise over $100M through this tool. Obviously, each project has its own demand and success and some fail to raise substantial amount through it.
Also, while in the past there were limited amounts of blockchain/crypto investors and funds then the success of some projects and the high multiple returns of those and the increase in the price of Bitcoin and other tokens and popularity caused the drastic increase of funds, investors, community VC’s and even family offices to get into the space and start investing.
That being said, with all these fundraising options and different types of investors it’s extremely important for projects to understand that it’s not a one type or solution that fits all. Each project is unique and should have its fundraising strategy tailored to the type of project, team, go to market strategy, capital raised and many more criteria.Same with the type of investors who fit each project. The right investors could make a project successful or crush it!
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