So You Did a Token Sale

Over $12 billion worth of value has been given to support various blockchain and cryptocurrency projects globally through token crowdsales and thousands of new blockchain companies have been created due to the boom in the industry.

For a blockchain company that started in 2014, it has been personally exciting to see so many funds, companies and individuals who are also excited about the space.

According to an article in Fast Company and a Harvard Business School study, "Why Most Venture Backed Companies Fail," 75 percent of venture-backed startups fail.

Anyone who has run a tech company before knows that having millions of dollars in the bank does not mean that the company will never ever have to do a venture-backed fundraise.

What happens then? If the crypto-market support is abysmal, blockchain companies will likely need to pursue those traditional capital channels including equity rounds, acquisitions, and mergers.

Instead of token companies buying traditional equities, I imagine the future will be a situation where a company buys another company for their tokens and packages up the equity.

Token swaps have been prevalent especially for blockchain protocol companies launching their own native tokens.

The concern of buying a company that could turn out to be a unregulated security is a risk for most companies that are looking to be in the buy position as an Acquirer, even if it was possible from a legal and a financial perspective.

The crowdsale method might have a substitute for the traditional seed round in a traditional startup journey so I imagine most of the blockchain companies that have done a token sale will start to seek after equity rounds from strategic partners.

The true test over the next several years will be to see which companies can execute building the product and gaining the traction.