Reverse ICO: ICO for an operating business

CornerRight 2 min


Icons/Technology/Tech No.5

Business analysis


Icons/Technology/Tech No.1

AI

The ICO process is often associated with startups and small companies that are kick-starting their activities through crowdfunding. However, there’s another scenario, similar to IPOs, where grown up companies are collecting money to expand their services. To diversify it from the usual startup image, we call it “reverse ICO”.

Why perform reverse ICO?

It’s easier, less formalized and more elastic than IPO. You can use it as a low cost way to collect money and deploy a project. Reverse ICOs tend to attract a lot of investors, as the company is already up and running and has Immediate value.

The biggest challenge at the beginning is to find a way to tokenize your business model. Is there a scenario that can give your tokens real value? It might be connected with granting your investors the right to vote within your platform. It gives them access to extra resources or features and the possibility of a share of the earnings. For more ideas, check our blog post: How Does A Token Gain Value?

There is yet another benefit of launching an ICO – your company is associated with blockchain, and that’s a proven way to boost the public interest in your brand.

Examples of reverse ICOs

Eastman Kodak is a perfect example – a well established traditional brand with a long history introducing a new copyright licensing platform, and tokenizing it to rise funds (in form of KODAKCoin). The share price of the company tripled after the announcement of the ICO.

Some other examples include Telegram (collecting $1,700,000,000) and Kik (collecting $50,000,000). In short: It’s proven to be an effective way for crowdfunding for mature companies.

How to launch a reverse ICO?

Technical details work the same as in the usual process. If you want to learn more, check the 7 articles and an estimation tool prepared by our team:
Preparing Your Company For ICO

Are you looking for a blockchain software house for your ICO development?

Let’s talk. 4soft is in the Top 10 Blockchain companies according to Clutch.io. We’ll be happy to help.

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