Cryptocurrency ICO Failure and What the Fallout Can Reveal

Cryptocurrency ICOs were the talk of the crypto town in 2017 and 2018, with early investors reaping huge rewards for getting in on the ground floor of many projects. ICO returns not just in the thousands but in the hundreds of thousands were recorded, and for a while it was a kind of gold rush within the gold rush of cryptocurrency itself. Not all ICOs are created equal however, with some cryptocurrency startups being outright scams, and it seems that the results of a failed ICO can tell you more about a company than a successful one can.

Remaining Civil in Defeat

Civil, formed in 2017, aimed to revolutionize digital journalism through a series of blockchain-based platforms. Early investment of $5 million boded well, and the firm launched a month-long ICO in September 2018 with hopes of raising another $8 million. However, public interest wasn’t as forthcoming as they had hoped, and only $1.4 million of that was raised, causing Civil to call the public funding round off and refund investors.
Where others might have folded, Civil responded with stoicism, stating: “We expected a different outcome when we launched the sale, but circumstances changed. We learned a lot of lessons which we will reflect on in the coming weeks and share with our community and the public.” Civil have stated that the platform will still launch, that their partnerships with Associated Press and Forbes remain unaffected, and that a new token sale is in the works. “We’ve often said that this is a grand experiment,” says Civil founder Matthew Iles, “and when you’re trying to do so many firsts, you’re bound to make mistakes or learn what works and what doesn’t along the way. This sense of evolution not just as a business but as a decentralized community is at the heart of what makes Civil so special.”

Equi and the “Global Frenzy” That Wasn’t

Equi, the British-based venture capital ICO headed by Lady Mone of Mayfair, took an altogether different approach. After the much-hyped (by Equi) ICO raised only 10% of its $75 million target, even after a six-week extension, the public sale was abandoned and some investors were refunded while others stayed on, a decision not seemingly taken by the investors themselves.
Low-level online promoters called ‘bounty hunters’ then discovered they’d been paid just 4% of their promised fee. Angry groups sprang up online, with Equi pointing all complainants in the direction of their London law firm and blaming the communications company who had quit due to “irreconcilable differences” during the ICO. Baroness Mone changed the name to Equi Global and flew out to Silicon Valley to fish in richer waters while the Equi team dealt with the fallout, managing to snag Apple co-founder Steve Wozniak.
The appointment of Wozniak may suggest a different funding path has been secured, away from public eye and potential after effects when the project isn’t quite the “global frenzy” you predict.

I Get Knocked Down…

Civil and Equi may have navigated different paths around the obstacle of a failed ICO, but neither have been put off their respective goals. This demonstrates that a failed ICO need not represent the end of a project. if anything, it gives future investors a valuable insight into how a company might act when things go wrong.

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