Crypto Crowdfunding Platforms for Startups
Kickstart your startup business with the right crypto crowdfunding platform by generating capital real quick.
Cryptocurrency is widely becoming prevalent all over the world right now. The entrepreneurs who were talking about investing in stocks are planning to invest in cryptocurrencies. They are calling their crypto business consultant and asking which coins to invest at this time. But most of them think that investing in cryptocurrencies is very complex and needs more amount of money. But the fact is you can start any business by generating capital using the crypto crowdfunding platform. Amazing right? But that is true. You can collect the capital for your desired business through the process called “Crypto-crowdfunding”.
Many of us would have come across the term crowdfunding. But…
What is a Crypto Crowdfunding Platform?
Crypto crowdfunding platform is the medium to conduct token sales for gathering required capital. That is..crypto fundraising is a way of collecting funds from potential investors. But how does a crypto crowdfunding platform work? They connect fundraisers and investors in the token sale. The fundraiser creates tokens and promotes token sales through this crowdfunding platform. Depending on the type of crowdfunding, the principle of generating capital will vary.
Speaking of crypto crowdfunding, it is a money-making strategy, especially for startups who are short of funds to build their crypto empire. Crypto crowdfunding is the process of crowdfunding from investors who are trading in the crypto market through a certain valuable process. Crowdfunding in the crypto field differs based on the platform that you choose to generate the capital from. But how they help startups might be your question. Let us find the answer with…
Why do Startups Prefer Crypto Crowdfunding?
Compared to traditional fundraising methods, crypto crowdfunding is an easy and an effective way of fundraising. There are several other reasons why startups should choose such a profitable fundraising strategy. Let us have a brief overview of them one by one.
Simple and Efficient Way of Fundraising
Unlike traditional fundraising, crypto fundraising does not have any strict regulations for approval. Also, it does not possess any paperwork and intermediary influence to oversee the fundraising. With an effective crypto crowdfunding platform, token distribution and connecting with investors becomes easy.
With the increasing demand for cryptocurrencies and their benefits, people prefer to invest in cryptos more than earlier. For such investors, crypto crowdfunding platforms provide simple but secure investment opportunities. So attracting global investors is not a complex process for you as a startup.
Benefits of Decentralization
All fundraising transactions are recorded securely in a distributed decentralized ledger, blockchain. There is no middleman interference in crypto fundraising since the crypto crowdfunding platform takes care of fundraising processes. So there is a low risk of vulnerable activities and investors will feel more confident.
As stated earlier, a crypto crowdfunding platform connects you with a pool of investors. If your crypto project attracts potential investors, you can attain enough funding with confidence. Meanwhile, it also benefits your startup business to get great exposure. By getting the business bonding with global investors, you can uplift your business worldwide.
The tokens used in crypto crowdfunding are easily tradable across global exchanges. Furthermore, the tokens, especially security tokens are easy to tokenize as they represent real-world assets. This is such a beneficial factor for you as a startup to increase the fundraising potential.
Thus crypto crowdfunding meets your startup goals and offers you incredible benefits all the way possible. Starting from Ethereum, many crypto projects have been utilizing crypto fundraising for business.
For example, Ethereum raised capital of $4 billion in 2018 through this crowdfunding strategy. So for aspiring startups, crypto crowdfunding is a boon to meet their funding needs.
Now, you may be ready to initiate fundraising processes. The feature-rich crypto crowdfunding platform can simplify this efficiently. Speaking of fundraising, the crypto landscape has a variety of fundraising methods. They help startups generate their required capital and fulfill their business idea. Here we have a closer look at the…
Top Crypto Crowdfunding Methods in Market
There are certain crowdfunding platforms in the crypto industry where any startup can generate the required capital and fulfill their business idea. The most prominent ones are
- ICO (Initial Coin Offering)
- IEO (Initial Exchange Offering)
- STO (Security Token Offering)
These three methods have revolutionized the entire crypto industry and led to the rise of new tokens in the market. After the success of the Ethereum token, this crypto-based crowdfunding emerged as a successful initiative for businesses. As a result, many crypto crowdfunding platforms were also added to the crypto space. Here, we get to know the top 3 crypto crowdfunding methods and their significance for startups.
ICO — Initial Coin Offering
This is the initiation of the finances that lead to the trust of raising funds without any central regulations. Blockchain crowdfunding started its phase with ICO. ICO is similar to the Initial Public Offering (IPO) that we know in stock trading. Initial Coin Offering is the initial investment of the public over a particular token. The token is purchased by the public in exchange for cryptocurrencies. There are certain benefits in investing or initiating a token in the ICO for your business strategy:
- ICO is easy to start. There is no need for paperwork or any other regulatory principles when it comes to launching an ICO. Anyone who has prior knowledge of cryptocurrencies and has a trusted crypto crowdfunding platform can initiate an ICO. The white paper and ICO tokens play an important role in pushing the financial flow of the ICO campaign.
- All popular tokens nowadays once had low prices when they were at the investment stage. So, it is best to invest in tokens during ICO crowdfunding. It is quite acceptable that the token would be the most successful token in the entire crypto market one day.
- No need for any regulations or legal hassles if you invest in an ICO token. You are free to initiate any token and gather funds. But, make sure that your tokens are getting listed in the crypto market. Any token without any listing will be considered a scam. Because investors cannot invest further in it.
Rest assured, Initial Coin Offering Platform is one of the efficient ways to do cryptocurrency-based crowdfunding. There are talks about ICOs as scams due to the lack of complete regulation even from the exchange side. But to be specific, not all ICOs are scams. Most of them are legit. As stated earlier, the second most popular cryptocurrency — Ethereum started its journey through ICO. IEO came to the rescue as the next level of crowdfunding with certain updates that the ICO had missed.
Let us have a look at…
IEO — Initial Exchange Offering
What if crypto crowdfunding is done by the Exchange platforms? That is true.
With its variable trust and efficiency of the ICO, the IEO took the reign of ICO crowdfunding. To keep trust among investors, crypto exchanges analyze the entire crowdfunding process. That includes the processing of the whitepaper assessment to approving the fundraising.
There is no need to worry about the investments that the investor has made as the exchange will take care of it. Guarded by the Blockchain security, all the investment-based transactions to the particular startups will be stored in the ledger and hashed in the separate blockchain. So, there are minimal chances that the particular supplier of tokens will deceive the investor. Also, with minimum listing fees, the exchange companies themselves can list the tokens with their listing pair. This enhances the token value in the trading arena.
So if you wish to process your fundraising with a central party overseeing, Initial Exchange Offering is the perfect fit for you. The next crypto crowdfunding method is…
STO — Security Token Offering
STO is an upgrade to the ICO with enhanced features and updates on regulation and conduction principles. Due to some ICOs having become scams, many investors and entrepreneurs are afraid to move on with ICOs. So to improve trust and security, the Security Token Offering came as an alternative to ICO. Let us discover…
But what’s special in STOs?
- They are strictly regulated and managed. Yes, unlike ICO you cannot create your token and sell it in the crypto market. It needs certain eligibility conditions. These conditions apply to both investors and fundraisers. They are regulated and managed for the proper selling of tokens and the whitepaper should contain the required details.
- STO tokens are programmable based on your business requirements and regulations. Also, they provide more liquidity similar to ICO tokens. STO token is easy to trade and investors can invest it at any time. So, this token is more liquid compared to regular tokens or securities.
- With security tokens, you can own a property on a fractional basis. That means with a security token you can own even a fraction of the property and buy another fraction of the property. You need not put all your funds into one property when it comes to security tokens. In addition to that, all security tokens are completely traceable and compliance-managed.
Above mentioned points adds beneficial view of why to choose Security Token offering as your crowdfunding idea. On that note, selecting this STO platform to create funds for your startup business is a noteworthy idea to start on.
So these are the top crypto crowdfunding methods in the crypto space. Each of them has unique characteristics and is suitable for diverse fundraising needs. Like initial coin offerings, it provides easy crowdfunding with minimal security regulations. However, the rare cases of scam impact the growth of ICO fundraising. Consequently, considering the security, both investors and startups switched to STOs as it comes with SEC regulations. Similarly, startups who want less marketing but immediate exposure to fundraising in a secure way choose IEO fundraising.
Eventually, choosing the right crowdfunding method completely depends on your business requirements. Whatever it is, a feature-loaded crypto crowdfunding platform provides you with convenient fundraising. But make sure you create an investor-friendly platform. This may help you reap promising benefits in fundraising as well as your business.
How to get started with a Crypto crowdfunding platform?
The crypto crowdfunding methods have sparked a transition in how crypto startups raise capital. Whether it is an easy ICO, Secure STO, or exchange-powered IEO, connecting passionate investors with fundraisers is the ultimate aim of crypto fundraising. A dynamic crypto crowdfunding platform keeps the promise well and enhances the way of crypto fundraising. For that, it should be bound with security, innovations, and technical capabilities. A well-experienced team of experts from a reputed crypto crowdfunding platform development company may guide you in this. So make a wise decision with professional guidance to take your business to greater heights.