Home Initial Coin Offering Venture Capital or ICO? Startups Face Cash-Raising Dilemma

Venture Capital or ICO? Startups Face Cash-Raising Dilemma


Aung Kyaw Moe and Jun Hasegawa have a lot in common.

Both are entrepreneurs. Both left home to seek their fortunes. Both are now working on digital-payment projects with operations in Southeast Asia.

But when it came to collecting money to fund their startups, they took opposite paths. Aung, 42, is raising as much as $30 million in venture capital with the goal of perhaps going public in a few years. Hasegawa, 36, brought in $25 million through a so-called initial coin offering, an unregulated sale process that’s exploded in popularity in the last year. His company’s tokens, OmiseGO, are already worth more than $2 billion.

Photographer: Taylor Weidman/Bloomberg

“It’s been crazy,” says Hasegawa, co-founder and chief executive officer of the startup Omise. “It took only six months to get here.”

Aung watched Omise’s rocket ride with wonder and a touch of envy. Should he try an ICO too? While venture money can be harder to get, he ultimately decided on that route and said ICOs are too shaky a foundation to build a business on.

“If it all came crashing down one day, you would have no control,’’ said Aung, whose startup is called 2C2P, for Cash and Card Payment Processor. “I like to go to bed with peace of mind.’’

What’s an ICO? Like an IPO But With Digital Coins: QuickTake Q&A

The rivals illustrate a dilemma startups are now facing the world over. Should they pursue traditional venture capital with its predictability and limitations or turn to ICOs where there is quick money, volatility and innumerable unknowns?

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