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Binance CEO believes ICOs are “good to have” and necessary above VCs

CEO of mega cryptocurrency exchange Binance, Zhao Changpeng, has claimed that the strategy veered towards initial coin offerings is better than that of venture capital, despite the notorious risk of fraud attached to the cryptocurrency crowdfunding method.

Written by Becky Leighton Published on

The CEO of Binance, Zhao Changpeng, has expressed his opinions on initial coin offerings versus the venture capital model – and one has obviously taken his fancy significantly more than the other.

Zhao released a blog post – “ICOs — Not Just ‘Good-to-Have,’ But Necessary on Monday in which he slates the venture capital (VC) world,  writing that he has been led to believe through his own experiences and while keeping tabs on numerous other projects that “raising money through ICOs is about 100 times easier than through traditional VCs, if not more.

Owing to the fact that Binance is one of the world’s leading cryptocurrency exchanges, the CEO’s bias towards the model of cryptocurrency token offerings as a fundraising tactic should be somewhat unsurprising.

Zhao lists the reasons why he believes that ICOs are better, which involves tasks such as “[writing] an awesome white paper about your passionate dream project” which will cater to “thousands of people around the world who speak your language, [and] understand your vision” instead of the comparatively measly tasks in VC which is that such as”[courting the] VC investors, doing powerpoints, business plans, pitch decks, executive summaries, due diligence, term sheets, investment agreements, offshore company structure setup, board of directors, make reports for them” and more.

Zhao argues his point outlining why initial coin offerings (ICOs ) are a good thing despite their risks attached, saying that “a vast majority of ‘professional VCs’ have no clue about the projects or field they invest in” whereas there are “a couple of thousand retail investors in an ICO” who “range from novice to advanced potential users of the product” and are “genuinely interested in the industry” and “shy about sharing any negative findings”. 

He begs the question which group between the two will be likely to be more thorough in their investment findings.

In a manner of advice, Zhao says to investors that they shouldn’t just follow the trends. Instead, they should opt for projects that interest them, and in an urge, he emphasizes the importance of reading the white paper.

Don’t just follow the herd. Invest in projects you understand. Read the whitepaper.

Start trading cryptocurrency with Coindirect.

Written by

Internet writer looking to find the right piece. Also presents things on radio and happens to be a chip off the old blockchain. @BeckyRLeighton

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