Binance CEO Says ICOs Are ‘Necessary’
Zhao, the CEO of Binance, the world’s largest cryptocurrency exchange, believes that initial coin offerings (ICOs) are set to supplant traditional venture capital as the primary method through which early-stage startups finance their growth.
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Writing in a blog post titled “ICOs — Not Just ‘Good-to-Have,’ But Necessary,” Zhao praised the virtues of ICOs, explaining from first-hand experience that “raising money through ICOs is about 100 times easier than through traditional VCs.”
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The supposed benefits that VCs provide startups, he argued, are far overblown, as most VCs have “no clue” about the projects they invest in or how to help a fledgling company get off the ground.
“While some professional VCs investors are truly experts in their field, and genuinely trying to help entrepreneurs, I find the vast majority of ‘professional VCs’ have no clue about the projects or field they invest in. Many of them have zero startup experience and don’t even have a basic understanding of the technologies involved their fields.”
Zhao further argued that he believes a larger ratio of ICO-funded projects will ultimately prove to be successful than “traditional VC invested projects,” and he noted that many VCs have already begun investing directly in ICOs.
Though not mentioned directly, Zhao drafted this post against the backdrop of his ongoing legal dispute with renowned VC firm Sequoia, whose Chinese division attempted to purchase a minority ownership stake in the exchange last year.
As CCN reported, Sequoia has Zhao for allegedly violating an exclusivity agreement by entertaining an offer from another VC firm after discussions between Binance and Sequoia broke down.
Zhao denies the allegations, and on Monday he tweeted that Binance “may soon require all projects applying to list on Binance to disclose if they have any direct or indirect relationships with Sequoia.”
Binance has not responded to CCN’s request for clarification on what, specifically, Zhao meant by that statement.
Author – Josiah Wilmoth
Source – CCN