CoinDesk Research's second spotlight study focusing in on blockchain ICOs and how entrepreneurs are using it to fund their projects.

1. CoinDesk Research
BLOCKCHAIN ICOS
Spotlight Study

2. ICO Funding is Closing in on Blockchain Venture Capital
ICOs are becoming attractive fundraising and investment alternatives
for both entrepreneurs and investors
Data Sources: CoinDesk’s 2017 ICO Survey, CoinDesk’s Venture Capital database, Smith and Crown
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3. Two Funding Models Are Emerging
Blockchain protocols, companies, and applications are also considering hybrid models,
raising from ICOs as well as VCs
Entrepreneurs have begun considering blockchain token sales (“ICOs”) as fundraising
alternatives to traditional venture capital and angel investment
PROTOCOL
APPLICATION
COMPANY
HYBRIDICO
Notes: Numerous protocols are also maintained by companies like the Zerocoin Electric Coin Company, open source communities, non-profits like the
Ethereum Foundation, and consortiums like Hyperledger
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4. Our 2017 ICO Survey Highlights the Viewpoints
of 400+ Blockchain Enthusiasts
- Entrepreneurial insights into selling blockchain tokens
to raise funds for a project
- Retail public on ICO investment opportunities
- Institutional capital entering the market
Data Sources: CoinDesk’s 2017 ICO Survey
OUR GOALS
- Identify perception around ICOs from both a
fundraising and investing perspective
- Determine factors driving and repelling investment
- Gauge viewpoints on structuring ICOs and the
relation to raising funds traditionally
- Determine the balance of retail and institutional
demand for ICOs
INSTITUTIONAL
enterprise managed money
RETAIL
general public investors
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5. ICO Sentiment Survey:
Key Takeaways
76% 57%
29% 26%
91% 45%
Of entrepreneurs reported they have not
raised money with an ICO but had
seriously considered or attempted it
Of ICO investors cited investment and
speculation as their primary motivations
for investing
Believe that institutional capital will
start to control ICOs over retail
investors
Believe the majority of ICOs could have
raised traditional VC or angel
investment
Of investors who have participated in an
ICO would invest again
Of those yet to participate in an ICO felt
limited by the lack of information and
third party research
+ insights into ICO caps, multiple rounds, portfolio
allocations and mixing in traditional investment
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Data Sources: CoinDesk’s 2017 ICO Survey

6. INTRODUCTION TO ICOS
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7. What is an “ICO”?
“An ICO is a popular way to raise money for a new
cryptocurrency project by distributing a percentage
of the initial coin supply among the early supporters
and backers.”
- Smith and Crown
“A blockchain token is a digital token created on a
blockchain as part of a decentralized software
protocol.”
- Coinbase, Coin Center, USV and Consensys
Data Sources: CoinDesk’s 2017 ICO Survey, Smith and Crown, “A Securities Law Framework for Blockchain Tokens”
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“ICO?”
“Crowdsale?”
“Blockchain Asset?”
“Cryptocurrency?”
“Protocol Token?”
“Crowdfunding?”
“Token Launch?”
Confusion around blockchain naming
conventions unsurprisingly extends to
new protocol token sales

8. Industry Perspectives
Data Sources: CoinDesk’s 2017 ICO Survey
“I call it a token launch, particularly we’re
thinking of calling it a token auction. With
the dutch auction for Gnosis, we’ve
essentially designed a new auction
mechanism.”
- Matt Liston
Gnosis, Strategy
“I don’t know if ICO or token launch are the exact right
terms. I think it’s still pretty early days to settle on
terms, but we should at least try and use terms that
try to adequately describe what the thing is that
people are buying in the first place. ”
- Patrick Murck
Cooley, Special Counsel
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“In 2017, the negativity bias [around
cryptocurrencies] seems to be evaporating
and institutional investors interested in
public blockchain’s will look to create the
flexibility to put capital to work.”
- Alex Felix
CoinFund
“Institutional capital flowing into the space is
an important aspect of growth today, but the
retail investor access these systems seem to
promise speaks to the democratizing nature
of the technology.”
- Jake Brukhman
CoinFund

9. MARKET DEMOGRAPHICS
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10. ICO Investment:
Market Familiarity
83%of those familiar with cryptocurrency
were also familiar with ICOs
Data Sources: CoinDesk’s 2017 ICO Survey
Survey Segment:
Aggregate
Survey Segment:
Entrepreneurs
29%of entrepreneurs without experience raising
with an ICO had seriously considered or attempted it
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11. ICO Investment:
Preferences
Data Sources: CoinDesk’s 2017 ICO Survey
28%of investors would consider allocating
over 10% of their overall portfolio into an ICO
20%of investors would invest in an ICO with an
unknown and private team
Survey Segment:
Investors
Survey Segment:
Investors
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12. ICO Investment:
Experience
Nearly halfhad participated in 1 or more ICO
Data Sources: CoinDesk’s 2017 ICO Survey
Survey Segment:
Aggregate
Survey Segment:
Aggregate
91% of investors said they would consider participating in additional ICOs
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13. ICO Investment:
Motivations
Data Sources: CoinDesk’s 2017 ICO Survey
“Curiosity” – wanted to learn about the opportunity and technology
“Consumer interest” – I needed to purchase the tokens to use a blockchain platform
“Investment” – I believed in the long-term vision for the project and believed the value of the tokens I purchased would increase
“Speculation” – I believed the value of the tokens was likely to rise regardless of the utility of the platform
Over three quarters of ICO participants cited “investment” and “speculation” as primary
investment motivations
“Team” and “use case”
were the most important factors in analysis
Survey Segment:
Aggregate
Survey Segment:
Aggregate
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14. ICO Investment:
Hesitations
Data Sources: CoinDesk’s 2017 ICO Survey
Over halfof non-ICO investors cited
“lack of information and third party research”
as dominating concerns
Only 29% of investors and 11% of entrepreneurs believe
“the industry has done enough to self-regulate and raise
awareness”
Survey Segment:
Aggregate
Survey Segment:
Investors
Survey Segment:
Entrepreneurs
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15. ICO INVESTMENT STRUCTURE
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16. ICO Structure:
Funding Caps
56% believe that ICO issuers should
place a maximum cap on their funding rounds
68% of those who specified a reasonable cap chose $1 -
$9.9 million
Data Sources: CoinDesk’s 2017 ICO Survey
Notes: For example, a cap like 1 million ether or $10 million
Survey Segment:
Aggregate
Survey Segment:
Aggregate
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17. ICO Structure:
Follow-on Rounds
Data Sources: CoinDesk’s 2017 ICO Survey
Notes: For example, funding rounds like ”seed”, ”series A”, ”series B”, etc. from startup equity markets
Survey Segment:
Investors
Survey Segment:
Entrepreneurs
Nearly halfof investors agree
that ICO issuers should plan for multiple rounds
Over a thirdof entrepreneurs agree
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18. ICOS AND TRADITIONAL FUNDING
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19. ICO vs. VC:
Fundraising Ease
Data Sources: CoinDesk’s 2017 ICO Survey
Survey Segment:
Aggregate
Just over a quarteragree
that ICO issuers could have raised traditional funding
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ICOs are often praised as an opportunity for:
- entrepreneurs to raise funding from a widened global
investor pool
- expanding the retail public’s access to investing in new
projects
But, many in the community have concerns:
- are ICOs taking advantage of underinformed retail
investors that accreditation and other requirements
traditionally help address?

20. ICO vs. VC:
Mixing Funding Sources
Data Sources: CoinDesk’s 2017 ICO Survey
Notes: For example, raising a seed round of VC funding before or after an ICO
Survey Segment:
Investors
Survey Segment:
Entrepreneurs
Nearly halfof both investors and entrepreneurs agree
that blockchain startups should consider traditional funding in addition to ICOs
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21. ICO vs. VC:
Institutional vs. Retail Capital
Data Sources: CoinDesk’s 2017 ICO Survey
Survey Segment:
Aggregate
Nearly halfbelieve
ICOs are an opportunity for institutional investors
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22. About CoinDesk
- Find out more at www.coindesk.com
- Follow us on Twitter: @CoinDesk
- Subscribe to our daily email newsletters for the latest blockchain news
- If you have data or a topic you think should be included in future Spotlight
Studies, email research@coindesk.com
- We also welcome any general feedback you have on the report
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23. Authors
Pete Rizzo
Editor
Bradley Miles
Researcher
Alex Sunnarborg
Researcher
@pete_rizzo_
@Bradley_Miles_
@alexsunnarborg
@CoinDesk
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24. Disclaimer
CoinDesk makes every effort to ensure the information used these slides is accurate and up to date. We cannot, however, accept responsibility for any loss or
inconvenience caused by reliance on the material contained here.
This presentation does not constitute financial advice or an investment recommendation in any way whatsoever. It is recommended you perform your own
independent research and/or speak with a qualified investment professional before making any financial decisions.
CoinDesk is owned by Digital Currency Group, one of the most active investors in the bitcoin and blockchain technology industry. Many DCG investments are
referenced in this report, and a full list can be reviewed at www.dcg.co. CoinDesk is run as an independent entity, and its editorial team does not give preferential
treatment to DCG investments when they are referenced in research reports or news posts. DCG portfolio companies referenced in this report include Zcash
Company.
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