Knowbella Tech

[Anthropoid]

What is a Reverse ICO?

Reverse ICO: Future Initial Coin Offering Fundraising Model for Companies

By Bitcoin Exchange Guide News Team - June 25, 2018

Many of us are astounded by the staggering amount of money generated by Initial Coin Offerings (ICOs). In just the first quarter of 2018, it is estimated that more than $6.3 Billion in funding was raised through ICOs.

Yet, on the horizon is a potentially even greater wave of ICOs. Call it “the reverse ICO,” where existing businesses realize that the best way for them to compete is by decentralizing themselves.

What Exactly Is Reverse ICO?

In a reverse ICO, an already-established and highly-centralized company issues tokens to decentralize their business. The company first offers tokens to the investors, as a replacement for their traditional shares.

Each token holder gets to share the company’s profits and become involved in their decision-making process. In essence, a reverse ICO is simply a traditional share allotment event, except for the fact that transactions are made in dedicated tokens over a blockchain network.

The benefits are two-fold. By doing an ICO you can raise more funds which can be used to revamp and expand the business. And you can also decentralize your infrastructure with a cryptocurrency. That puts the company in a better position to be part of the new token economy.

A Tokenized Future?

In the years to come, as the trend toward “reverse ICOs” increases, we will see new jobs such as “Tokenization Consultant” and new industry practices “reverse ICO departments” at law firms and management consulting firms.

It has profound impact for the stock market, IPOs, regulation, and community ownership as well as the jobs necessary to transition existing companies from the centralized paradigm to the decentralized paradigm.

Kik, the social media app with 300 million users and 15 million active users, was able to raise $98 million in its ICO last year. Only time will tell if the reverse ICO worked out, but so far so good. Then there’s Telegram which has raised an astonishing $850 million already.

https://bitcoinexchangeguide.com/reverse-ico-future-initial-coin-offering-fundraising-model-for-companies/