Stakeholders in the burgeoning market for initial coin offerings (ICOs) have reached consensus: the practice of presales needs to be reformed.
Originally conceived as a way to bootstrap new tokens by covering their legal and marketing expenses, some ICO issues are now offering crypto-insiders steep discounts on tokens and better distribution terms in presale rounds, where the public at large isn't invited to invest.
For some of the less buzzy ICOs, most of the money appears to be coming through private rounds. Ripio raised $31 million of its $37 million token offering in its presale and Swarm raised nearly all of its $5.5 million funding from its presale.
Brayton Williams, a co-founder of blockchain incubator Boost VC, is no stranger to the market. Having been involved with bitcoin since 2013 (at one time pledging to back 100 bitcoin startups), he's yet to greet the ICO market with the same enthusiasm owing to these problems and others.
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