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Here is how this start-up raised $153 million in three hours!!

By Newsd
Updated on :
Here is how this start-up raised $153 million in three hours!!
Source: TokenMarket

While the start-up culture in continues to develop across boundaries, a start-up firm Bancor raised $153 million in cryptocurrency in its own Initial Coin Offering, in just 3 hours!

This new magically potential way to raise capital for your business is called the initial coin offering.

What is Initial Coin Offering?

When a cryptocurrency startup firm wants to raise money through an Initial Coin Offering (ICO), it usually creates a plan on a whitepaper which states what the project is about, what need(s) the project will fulfill upon completion, how much money is needed to undertake the venture, how much of the virtual tokens the pioneers of the project will keep for themselves, what type of money is accepted, and how long the ICO campaign will run for. During the ICO campaign, enthusiasts and supporters of the firm’s initiative buy some of the distributed cryptocoins with fiat or virtual currency. These coins are referred to as tokens and are similar to shares of a company sold to investors in an Initial Public Offering (IPO) transaction. If the money raised does not meet the minimum funds required by the firm, the money is returned to the backers and the ICO is deemed to be unsuccessful. If the funds requirements are met within the specified timeframe, the money raised is used to either initiate the new scheme or to complete it.

Pros: There’s no filing requirements, no Securities and Exchange Commission rules, no quarterly reporting and no required public disclosures.

Cons:  The money you raise will be in digital cryptocurrency and your investors will buy “tokens” instead of shares.

However, this Israel-based company called Bancor is so familiar with the digital currency that it has developed a unique protocol that can enable just about anyone to develop their own digital “smart tokens” (or cryptocurrency) and then help them to make it marketable by giving it liquidity and a market price from day one.

The company attains this by letting your cryptocurrency to be able to be converted to other currencies (including the U.S. dollar) “through a new kind of economic model which uses an algorithmically discovered price to balance buys and sells” using an “innovative reserve mechanism.”

As per reports, Bancor’s platform is built on the blockchain, the hot technology that uses a “digital ledger” for chronologically recording movements of money. The blockchain is considered as a way to more securely manage online transactions by
most major banks and software companies as a way to more securely manage online transactions.

To do an initial coin offering, one has to first have a bulletproof business plan and then issue tokens. Here, the tokens are like shares.

If you want to do an initial coin offering you first come up with a business plan and then you issue tokens. The tokens are like shares. The investors who buy your tokens hope that your company’s plan succeeds so that the value of your tokens grow. That’s what the investors of Bancor, who include noted venture capitalist, Tim Draper of Draper Fisher Jurvetson, are hoping for.


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