Innovative ICO Projects May Help to Get Good Deals – Crypto Advisors from SmartHab
Investing in ICOs is still risky, however, it can bring big profits if the project has potential, believes Florence G'sell – Crypto Advisor at SmartHab. Together with the other Advisor from the company – Karim Sabba, she discussed successful ICO projects, shared opinion on investors’ roles and talked about the potential future of ICOs.
Interviewer: Blockchain & Bitcoin Conference Malta (BCM).
Experts: Florence G'sell, Professor of Law, Legal Consultant, Advisor at SmartHab (FG).
Karim Sabba, Co-founder & COO of Woorton and Advisor at SmartHab (KS).
BCM: Is it worth investing in ICOs in 2018? Should it be real sector or IT startup?
KS: ICOs are just a new way of raising funds. In decentralized structures, the value of the network, and thus the native digital asset, depends on its size and its usage. Here, the challenge is finding truly innovative protocols in a market flooded by all kinds of projects and getting a good deal.
FG: Although investing in ICOs is still pretty risky, it may also be very profitable when the project works out. For my part, I do think that ICOs should be launched in cases where projects rely on a blockchain-based technology: it is the technology which provides value added and plays the role of an underlying asset. ICOs are not adapted to the funding of projects that have nothing to do with a technological approach.
BCM: Can ICOs catch the interest of a venture investor?
KS: They have already caught the interest of venture capitalists. VC firms recently started to dive into this new asset class. Some of them just invest in tokens through SAFTs (specific contracts for ICOs) and some of them work out a hybrid deal with an equity and a token stake. Their role in ICO fundraising is growing, and entrepreneurs should loop them in as soon as possible. They are used to take risks, fund early-stage projects and understand the challenges of scaling rapidly, the only obstacle is educating them on this new method.
FG: According to a survey made by Context Capital Partners LP, 70,8% of institutional investors do not plan to allocate to crypto-funds in 2018, while 11,2% plan to do it, and 18% still haven’t made a decision. This shows that traditional venture capitalists are not massively moving towards the crypto markets. However, some of them, like Goldman Sachs, are moving fast, while specialized crypto investors are now emerging (Pantera, Hyperchain Capital, etc).
BCM: What is the future of the ICO industry?
KS: The market has seen a lot of new players coming from regulated and standardized fields. Hence, the methods used to raise funds start looking more like the "VC game" with advisory boutiques leading the roadshows and lawyers drafting the paperwork. As a consequence, launching an ICO may cost more but, in the long run, it may also be safer for institutional investors to participate in a project because they have more guarantees.
FG: For my part, I think that investors have already begun to be more and more rigorous concerning the characteristics of the project and the guarantees offered by the issuer. There will be a corrective movement towards the most convincing projects. Meanwhile, we can expect more and more control and regulation by the competent authorities both to protect investors and to prevent money laundering.
BCM: What are the best ICOs for investment in 2018?
KS: We do not invest in ICOs, we need to steer clear from any conflicts of interest as we help them with their liquidity needs. However, we have seen a few teams with very interesting technologies this year. Our attention was caught by Orchid Labs, developing a decentralized Tor alternative, and Hab, developing a secure data storage system for IoT devices. Most of the time, projects focus on developing apps on a very young protocol-layer base. And we tend to favour projects which add something to the existing tech with a different vision of that base-layer.
FG: Since I am not an investor myself, I do not look at ICOs as at the investing opportunities. However, I think that there is a room for innovative projects in the field of IoT, logistics and traceability.
ICOs will be discussed in more detail by crypto experts at the Blockchain & Bitcoin Conference Malta. Use an opportunity to discover more at the event!