Should You Pursue an ICO for Your Fundraise?

Every day I receive questions from prospective entrepreneurs from both startup and  growth companies asking if they should run an ICO.

I respond with two questions:

  1.     Does a blockchain-based system improve the product/service you offer?
  2.     How would a token improve the use and access of your product/service?

With the first question we explore how blockchain provides greater security, audit trails, and for some applications a lower cost of operation as it encapsulates many of the supporting functions. We then discuss how this impacts the company’s product/service and if it would benefit from a blockchain implementation.

The second question, delves into tokenomics. It’s the role of the token in the application. In the rush to raise ICO money many force the token on their system without regard to how it will be used. One can build the best system in the world but if users don’t want to use tokens to interact with it, it will go nowhere. It would be more prudent to find a token use case and then build a system around it.

The discussion around token usage is sometimes referred to as Tokenomics and answers the following:

How many tokens are generated and available?

What is the value of a token?

What does it cost to obtain a token?

What do you do with leftover tokens from the raise?

How many tokens does it cost to use your system?

And the list goes on…

Putting a token into the mix has the advantage of acting as a pseudo-currency through which you can incentivize other companies to build on top of your platform enhancing the performance and making it more robust.

You can more easily charge users of your platform such as those who want the data coming out of it and not the product/service itself. Even more, you could add AI algorithms to the system and charge tokens for the answers it produces.

I can even see tokenized systems of the future charging tokens for making a positive impact. For example, if the company’s platform generates more business through lead generation, the company receives a commission from the increased revenue of the company and not just the increased lead count.

Tokens also can incentivize others to provide ancillary services through your platform. If you need additional functionality you don’t have to build it all yourself, you can attract partner companies to build around your system and earn tokens for the use of their add-on application.

In short, building a digital ecosystem requires mechanisms to attract, incentivize, and compensate those who provide value. Tokens provide a seamless, non-invasive payment mechanism to achieve this.

An ICO promotes the use of blockchain based applications with strong tokenomics behind it.


Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.



If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months.

Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now!

If you have any questions, please contact us at

Previous Post
How to Estimate the Cost of an ICO
Next Post
Building a Company an Add-on or an Ecosystem

Related Posts

Food & Beverage Investments in Q4 2016

The Food and Beverage Industry has seen over $2.8B in funding in nearly 270 deals in Q4 2016. The Ingredients and Flavorings industry leads the way with over $2B worth of funding in 19 deals, followed by Candy & Snack Foods…

Top Texas Seed Ventures from Q4 2016

Top fundings for Q4 of 2016 were led by CognitiveScale, Medici Technologies, Phunware, Twyla, and Trendkite with the top ten fundings totaling $176M. Company Name Money Raised Announced On Date CognitiveScale $25,000,000 10/4/2016 Medici Technologies $24,000,000 11/28/2016 Phunware, Inc. $22,000,000…

5 Key Terms in the Blockchain World

Blockchain is a digital currency used by both Bitcoin and other cryptocurrencies and is currently gaining momentum around the world. Investors as well as people in the technology industry are all abuzz about how it will change the way we…