Recently I talked to Kenzi Wang — Superbloom Capital about his views on ICOs.
Kenzi had some interesting thoughts…
In your opinion, are ICOs here to stay?
Do you believe equity is important in investing in ICO's?
ICOs are to be regulated and they should be. The current boom is not sustainable and not all companies will last. The ones that have an amazing team, product and vision will go on to define the space. In the long run tho, ICO as a new mechanism of funding will drive a lot of innovation in new industries powered by blockchain. ICOs removes a lot of dependancies on big VC players, levels the playing field and breaks the geographical barriers.
Would you invest in a project that gives tokens and equity?
As long as they are structured correctly due to the purpose of the ICO, the specific economic model and token design, both security and non security based ICOs could flourish. I've seen successes in both models and also plenty of failures in both models.
What aspects to you look at when assesing an ICO investment?
In addition to the traditional venture assessment on team, product and tech, it's also vital to look at the token economics and application of blockchain. Is blockchain truly applicable in this case? It's a question we always ask. In addition, it's also important to look at the category of business. Will using blockchain technology revolutionize how traditional business was performed?
What position do you believe the SEC will take in regards to ICO's?
SEC will likely come up with more guidelines on ICOs regarding processes and security regulations. The process of regulation is good for the industry in general because it will make bigger companies more comfortable to go through an ICO.
What do you think the Chinese regulator will do in the long run?
The Chinese regulations have been seen a few times in the past. The impact of Chinese regulation is not as impactful at this time as the concentration of trading volume from China is not as significant as before. In the long run, regulation in the Chinese market will also stabilize the supply and demand and set tone for the next phase of growth.
Who do you think will take over the Chinese volumes?
Nearby countries and regions, such as Hongkong, Japan and Singapore will pick up the volumes. Bypassing VPNs in China will also provide some volume as well.
I have to add, that Kenzi's outlook proved true. We really are seeing regulation, but not closure, and Hong Kong and Japan are taking over influence, with the added significance of Korea.
Which is why we will be taking a lot of our projects on a roadshow with local players.