Binance’s CEO stated that ICOs are not just a convenient way to raise money for startups, but rather a phenomenon which is indicative of highly developed financial economies. Binance CEO Changpeng Zhao explained his position in an official blog post:
“I would say that raising money through ICOs is about 100 times easier than through traditional VCs, if not more. With the ease of raising money increased, logic says there may be 100 times more startups, well-funded startups, where ICOs are allowed.”
Zhao went on to assert that successful startups funded through ICOs are making the economies much more competitive. However, the data to prove that statement hasn’t been collected yet. On the other hand, the number of ICOs based on the ERC20 token is truly staggering. Zhao criticized the traditional venture capital fundraising schemes, which make the startup business unavailable for millions who are eager to participate:
“Say you wanted to invest $1,000 in the $50MM round for Uber. Guess what; they won’t take your money. Even if you had $1MM, they may or may not take it. They are likely being courted by more famous VC investors. Of course, you can TRY to give your money to a famous VC investor, if you meet their minimum threshold for investing, which is often a few million dollars.”
While describing the advantages of the ICO, Binance’s CEO acknowledged that the emerging industry is still facing a lot of issues, but expresssed his overall confidence:
“We are still in [the] early days of the industry, you can’t make advancements without encountering problems. Properly dealing with issues is how progress is made. If we had given up on e-commerce/internet because there was identity theft or credit card fraud, where would the world be today?”
In conclusion, Zhao pointed out that more and more venture capital firms are starting to participate in the ICOs, while governments are still reluctant to enter the crypto space.