- Changpeng Zhao says ICOs are better than and easier than venture capital funds.
- He added that most VC firms are now investing in ICOs.
Hong Kong: The CEO of Binance – the world’s biggest digital currency trading platform based in Hong Kong, Changpeng Zhao, stated in a blog post titled “ICOs — Not Just ‘Good-to-Have,’ But Necessary,” on Monday 7th May that Initial Coin Offerings (ICOs) are far more better than venture capital funds (VCs) in terms of performance, even with a high risk of failure.
Changpeng showed his support for ICOs stating that ICOs are “100 times easier” for raising funds than traditional venture capitals:
“Through my own experience and watching hundreds of other projects at a close distance, I would say raising money through ICOs is about 100 times easier than through traditional VCs, if not more. With the ease of raising money increased, logic says there may be 100 times more startups, well-funded startups, where ICOs are allowed.”
Changpeng stated that while some investors in VCs are real professionals in their field, a number of them have “no clue” about the VC projects or fields they invest in. He added that VCs are characterized by a notable absence of startup experience and insufficient understanding of projects’ technologies.
Though Changpeng agreed that the ICO market, being in its early stage, is encountering problems such as scams and failures. He holds that “compared to ‘traditional VC invested projects,’ a larger ratio of ICO projects will succeed.” He said:
“Most ICOs are new startup projects, and have a high rate of failure, just like in traditional startups. This is nothing new. Most ICO investors already know this. ICO investors are early adopters (and learners).”
Changpeng concluded that most VC firms are now investing in ICOs. He stated that VC firms “have their nose on the money”, adding that VC firms are more “nimble” than other large firms which are responsible for public wealth.
Cryptona.co has earlier reported that a legal dispute broke out between Changpeng and Sequoia Capital due to an alleged breach of an exclusivity agreement during negotiations of an $80 million, 11 percent stake investment deal which broke down last year. Though the Hong Kong court rules Sequoia’s allegations against Zhao invalid