INSUBCONTINENT EXCLUSIVE:
Authors: JordanNearly every aspect of the current ICO market is pay-for-play or otherwise tainted
I do not paint the industry with such a broad brush lightly but this sort of chicanery hasn’t existed since the heyday of print media when
journalists – myself included – took long, convoluted trips to distant headquarters where they enjoyed, as I wrote back in 2007,
“suckling on the sweet teat of junket whoredom.”As I said in this post on payola that briefly made waves a few months ago, payola is
stupid and everybody should be able to see through it
But many can’t and that’s a big problem.The ICO market is hot right now and there is money flowing from hand to hand in a torrent
One litigious company I spoke to took $10,000 to write a white paper and then returned a two page squib, refusing ultimately to refund a
Another company, below, is sponsoring an all-inclusive trip to Seoul for a press conference
Other companies take $400,000 or more to manage your ICO, offering PR and services look to have been cobbled together in a rush yet promise
millions in returns.Any time there is a gold rush there are carpet baggers
Any time there is a bubble there are those who would take advantage of it
And anywhere there is a new, unregulated way to make – or raise – millions of dollars you’d better believe there is someone
skimming.
Arguably not everyone knows the rules
They are, quite simply: don’t take free stuff in exchange for positive coverage and don’t take trips
Most tech journalists have a closet full of junk that needs to go back to manufacturers but they should never expect cash from a
manufacturer to smooth things along
Junkets are dangerous primarily because they cloud a journalist’s judgment
You can imagine Syria sponsoring a fancy junket into its war zone to understand the extreme chilling effect and bias this would
introduce.Further, the other services – legal, PR, social media – that are cropping up in the market are taking a huge cut and often
ICOs are hard work and very confusing
Instructions, to say the least, are unclear and anyone who has done one successfully – including this team that simulated and exit scam to
send people to their ICO consultancy – is considered a global expert
It’s as if someone discovered a working Bloomberg terminal an abandoned building and then began telling everyone they could make them
It’s not that easy.Ultimately these barnacles will be shaken off
TechCrunch was born out of the confusion of the second startup boom and, in turn, this created the modern VC industry, the modern pitch-off,
The good guys, so to speak, outnumbered the pay-for-play “incubators” and the rapacious investors and created what you see today: a tame
but useful system for unlocking wealth
Now that that system has been supplanted – and make no mistake: VC is over – the new organism has its own parasites and none of them are
particularly new.This does not mean the current system is perfect
Angel funding is almost impossible to find outside of major cities
Team and a dream has been replaced by team and multi-million dollar revenue
VC has become a spectator sport and its practitioners are – or feel like – rock stars
There is plenty of nastiness in that business.But crypto is a different beast entirely.“Everyone I talk to in this space is corrupt,”
railed one founder to me last week
He didn’t know where to turn so he did it all himself
It worked, but not without much trial and error.Another founder is handing out legal documents his legal team produced for him because he
was sick they cost so much
Given that the average equity investment in a startup requires one document and a handshake, to spend upwards of $100,000 for documentation
Add in an opaque, hype-filled market and a secretive investment class and you get an explosive mixture.This will not lost
The barnacles will fall off
But until then it’s sad that such a promising technology will be tainted by the behavior of a few growth marketers who are using the
techniques they learned selling penis pills to sell securities
Don’t expect financial authorities to cut these cheaters down, either
That can only be done by the market, a market that knows when enough is enough and that it shouldn’t cost dumb money to raise smart
money.You can’t pay for coverage
You shouldn’t charge to pitch
You shouldn’t make profit on wild inequity
But people will do these things and more and things will not change until the entire industry – from the founders to the service companies
to the investors to the media – agrees to scrape them off.Photo by Thomas Kelley on Unsplash
