Blockchain and Startups

The venture capitalist and fundraising landscape is getting disrupted with what blockchain startups and ICOs are promising to offer, making them a muse for many.

Starting a new venture in India can be quite a painful process for any entrepreneur. There are at least 13-15 inexcusable procedures required for setting up a startup here. It takes you several months and thousands of approvals from several different government agencies until you finally set yourself up. But what’s interesting is the fact that given all this, India ranks third in the global startup ecosystem. And blockchain startups, with something called an ICO on offer, seem to leverage this thriving ecosystem quite well.

The “Startup India” initiative by the government has proved to be a milestone in the journey of boosting entrepreneurship and encourage startups. This campaign, announced by the Prime Minister in his August 15 address, aims to restrict the role of states in the policy domain and promote bank financing for startup ventures.

Blockchain Startups and the Startup India Program

The reason why blockchain startups are making the most of the Indian startup culture in general, and the Startup India campaign in particular, is because this technology has stepped up to support the budding entrepreneurs. With data stored on a blockchain centrally, this data can be accessed for various requirements of a corporate entity, adding ease and drastically cutting down on the time required for various processes. The advantage of data on the blockchain; data can be decentralized, can’t be tampered by an unknown entity, and shared in real-time between entities involved in a network, for instance, the tax department, funders, patent authorities, and owners of the startup.

Blockchain Startups and all about ICOs

What is an ICO?

While blockchain startups proliferate, the million-dollar question is - “What is motivating investors to support this startup-type vehemently?” Well, the answer is – Initial Coin Offerings (ICOs). ICOs are a new form of investment, allowing blockchain-based startups to raise funds by selling cryptocoins to early investors.

Why the hype?

As the first generation of cryptocurrencies, Bitcoin and Ether, saw big payoffs, investors today are enthusiastically investing in vision over execution. Investors look upon ICOs as easy money and almost completely forget about the due diligence, which is necessary for any off-chain investment. The fact that people who invested in Ether and Bitcoin became rich fast seems to be creating a conducive atmosphere for blockchain startups to attract huge funding.

How to evaluate an ICO?

However, it is important that investors evaluate a blockchain startup before putting in their trust and money. In fact, there are a couple of projects that have emerged that help blockchain entrepreneurs adhere to best practices and also safeguard the interests of the ICO investors. These include WINGS and ICONOMI, both of which help blockchain startups reach their full potential, while at the same time provide a level of protection to the investor.

Blockchain is a digital technology, which with its feature of distributed ledger, makes offers a centralized point of control that makes it easier to create cost-efficient business networks. As the market for blockchain startups and ICOs matures, traditional venture capitalists could soon face a strong rival.