With all these ICOs springing up left, right and centre, I’m continuously bombarded with requests to publicise the “next big thing”. Blockchain will cure the evils of any industry while generating tokens connects innovation with capital like never before and democratises participation in groundbreaking ideas.
Conventional wisdom also tells us that 80-90% of all these ideas will disappear without trace. So how to evaluate an idea written on a scrap of paper? Last summer I spoke to a guy from one of Switzerland’s biggest private equity firms. He was bamboozled by the crypto start-up scene. Start-ups asked him to evaluate their project, but gave him nothing in the way of traditional evaluation metrics. “Smoke and mirrors” was how he put it.
Now we’re seeing ICO ratings agencies springing up. One even presented me with the novel idea that ICOs can be judged by applying behavioural game theory - throwing a bunch of personal questions at a start-up and analysing the answers. A look at any social media platform will reveal people scoffing at ICO raters. We are now in the bizarre situation of the ratings agencies being rated.
So in the brave new world of companies that aren’t really companies and shares that aren’t actually shares, what metrics do we use to evaluate these ideas: the team, the technology, the marketing, the financials? And which are the best ICO raters out there?