The global nature of the blockchain markets and its democratic openness towards almost every investor who makes her own decisions without the need to move to New York or Singapore to be in the center of the investment frenzy, has attracted many individuals from all parts of the planet. ​

The minimal investment amounts of 1 USD or less on some ICOs, have made the market open for people with smaller incomes. Is it better for those investors to spend money in casinos, or on innovative projects that might change the world?

However, the core morals of blockchain seem to be working against it in the long run regarding the speed of the growth of the token economies. The unique cultural essence of blockchain start-ups that are giving a lot to investors inhibits their growth. The reason is that many blockchain start-ups, blinded by the spirit of the community have become socialist self-management communes without the libertarian part! Capitalism knows private incentive and rewards founders with salaries, not just equity. In the case of the blockchain, the majority of teams only get tokens as compensation.


Imagine if companies from the old conventional economy just gave shares to the management team instead of salaries they can use to buy goods with, and only give those shares in the first years of business. Then, the only way for founders to survive and still work on their blockchain start-up is to sale part of their stakes (tokens) in the companies to whose growth they need to contribute. Would founders be more motivated if they own fewer shares in their companies? Of course not!


Thus, the one minor obstacle to the better growth of most blockchain companies is the inability or reclusiveness of many founders and blockchain investors towards the imposing of code that is rewarding the team on a monthly or annual basis indefinitely or while they serve the blockchain smart contract development. The community can also participate in establishing these rewards with smart contracts and voting, but rewards from which founders can live conformably have to exist nevertheless, to prevent the team to sell its tokens that should serve as a motivation to grow the economy to the benefit of all participants.


So, in order for the blockchain revolution to work, founders need to be rewarded properly at least to the level of successful founders in the conventional economy. Less socialism, more libertarianism!

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*How to Initial Coin Offerings raise millions without giving equity?
 
There are more ways this is done usually, as coins or tokens can be different from one another, but here is one standard way. The coins offered are for a certain utility or something that will be automated and that the users can access. Think of medical records that are accessed via a blockchain making sure they are protected and accessible globally at the same time. Every time someone uses this medical blockchain network, she or he needs to buy the coin that allows this network to function. The more people use the network the more its coin value increases.
 
The reason why when more people access their medical files on the network the more value of its digital coins increases is that they also exist in limited quantities! Hence, there are capital gains for investors just like with stocks. For coins usually there is no interest or dividends, just ownership of the currency used in a small economy. Companies can still take fiat dollars and euros for providing services of their network, but usually they need to convert them to their coins/tokens! Once they do, the value of the tokens increases!
 
Case study example

• Invested 40,000 of their own money including travelling costs
• Started in August and finished everything in February
• Raised $24 million and kept 50% of their coins (tokens) worth $14 million

 
Here is how a medical chain blockchain database startup raised money.
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The startup sold 30,000,000 coins at an average price of 0.8 USD per coin.
 
First, they sold at a discount of 40% in the private placement and the first week of the pre-ICO that was opened only to whitelisted investors who could invest at least $20,000. Then, they sold the tokens at a discount that was decreasing with every stage of the initial coin offering while reinvesting part of the money into marketing!
 
So, if they gave 20% discount on average, does this mean that the cost of capital was 20% too? I don’t think so! No. The blockchain venture got fiat money in return or around 24 million USD! Given they did not give high cash rebates but only token discounts, they cash COC for the fiat part were below 5%. The token discount was around 20%.
 
However, once they listed on exchanges the price of their token was already 20% above the highest selling price in the ICO! So, imagine that. The company did not raise just $24 million USD – < 5% discount. It also got 30% of the tokens in circulation and 20% of tokens for the founders valued at about another $14 million USD! Additionally, half of the buyers of their tokens were considered future users of the platform and not speculators.
 
The total cash investment of this amazing team? Around 40,000 USD! However, they were high-quality founders which is sometimes awesome.