Venture capital firms are always looking for highly lucrative, long-term profits. One of the aims of ICO is to distribute wealth across a broad set of people. Some IPOs have centralized investing format, which is accessible only to a small group of investors. ICO can be mixed with crowdfunding to let more people access it. Crowdsale protocols break down the confines of centralized transaction and people with limited financial capabilities can take part. This is an advantage for both sides, i.e. businesses and investors.
Despite recent devaluation of cryptocurrencies, their appeal will remain high. The use of cryptocurrencies will steadily increase to the point that we will achieve a level of wealth dispersion that we haven’t seen before. We will continue to see the development of decentralized platforms, that are accountable and accessible to any investor in the most transparent manner. Limited pre-sales participation of regular IPOs could lead to price anchoring prior to the actual public stock sales. This will have an adverse effect on total valuation and price equilibrium. However, initial ICO models are not without faults, but they can always be improved in the future.
Reverse ICO happens when certain companies with centralized products and services create ICOs. These companies simply seek financial gains and their token sales are done in an entirely centralized manner. Investors should be wary of poorly thought out tokens that have little use in the market and industry. These ICOs could end up hurting any investors. There are ICO models that mitigate any manipulation effort through sophisticated mining techniques. These methods remove the advantages of budget size advantages, by equally treating large and small bids. Large-scale investors are treated equally with buyers who buy only a fraction of tens. Information should also be distributed equally to all participants.