Why Big Raises Are Risky for Crypto Projects

  1. Some of the investors are short-term and will sell the tokens once they’re released whether it’s at a profit or loss; they’re expecting a positive return instantly when it is trading.
  2. A lot of big raises do not distribute tokens for 1+ years. By then, there will be competitors and the community will expect much more from the project.
  3. If the token price does not perform well on the secondary project, it can be harder to recruit developers and the sentiment around the project may sour. Crypto is one of the few asset classes where the valuations are primarily first and foremost driven by waves of fans and the crowd. The liquidity for the token will also be hard without much buzz and demand for the project — which makes the foundation tokens harder to be worth anything.
Envion raised $100M in January 2018, and now has $23k in daily trade volume.
A screenshot of Ethereum’s public crowdsale back in 2014. Ethereum raised $18.4M total ending on Sept. 2, 2014.

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Founder Web3Journal.com

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