The ease that ICOs can raise money was one of the things that made them so popular. Not only that, many people predicted that very ease will lead to accelerated technological progress as talented teams could raise money for their projects without any of the hindrances common with traditional venture capital or IPOs.

However, that has set up an unforeseen consequence which is a sort of paradox: Starting a new ICO is easier and more profitable then fulfilling the promises of your existing project. This sets up a situation where quietly abandoning your project and attaching yourself to another ICO is often easier and more profitable.

Of course, this assumes that most people are driven by profit, which I happen to agree with. I know there is an undercurrent of altruism that people try to attach to crypto developers, but let’s be real. The whole crypto sphere at the moment is about making money first and foremost. Whatever coin is showing the best yields will attract money no matter how much of a scam it is. So it’s safe to say that most people are concerned with making money, which is fine, but we need to understand that is the motivation.







The ICO situation is much different from traditional fund raising for mainstream businesses. In this model, a company generally needs a working product that shows promise with a history. Then they go through rounds of private fundraising until hopefully, they make it to the IPO stage which is the big payoff for everyone involved. In this model, getting the initial funding is difficult, especially in the amounts we are seeing with some ICOs which are in the billions of dollars. So this model does prevent entrepeneurs from ditching whatever they are working on and launching a new project because the money is so easy to get.

As you already know, regulation in the crypto space could it make it harder for ICOs to raise money and keep this cycle going, but not entirely, they would simply need to follow current SEC regulations. But either way, as long as starting a new ICO is easier and more profitable than following through for years with your current project, it may prevent some of these crypto projects from getting off the launch pad.