Nowadays, ICO or initial coin offerings are fashionable. ICO stands for the financial resources attracted in cryptocurrency from risk capital investors. In Latvia, just one company – “Digipulse” - has succeeded so far. What is this success based on and how can one achieve reliability? These were the main subjects discussed by the participants of Rietumu Fintech Club at their fifth meeting in the co-working space “The Mill”.
“I have faced the situation, when a startup company says - ICO is my last chance to survive! However, this is not how it happens and it is misleading, “says Alexey Pospehov, ICO expert from Russia and the founder of ‘Iconic.vc’. He was also participant of ‘eCom21’ - the largest conference on e-commerce in the Baltics held in Riga. “Current calculations show, that in the spring of 2018 there will be 5000 active ICO campaigns in the world. This already means huge investments in marketing and public relations along with excellent knowledge on cryptocurrency and legal and financial aspects of blockchain solutions to succeed in this tough fight.”
Alexey Pospehov emphasizes that there are no reason to hide something. All information is available in the digital environment and potential investors carry out very detailed research into projects. If there is no minimum viable product (MVP), just a good idea or a campaign built in short period, most probably, it will not work. People looking for cryptocurrency investments must be ready to provide answers to diverse questions. The project has to be transparent, has to have a strong support group, an honest system of bonuses and visible activities. One should bear in mind that the preparatory period of a campaign can extend up to seven months.
The Latvian project “Digipulse” was successful in everything. During a one-month campaign, it attracted 3474 ETH or units of cryptocurrency ‘Etherum’ from 420 investors. According to the recent current exchange rate, the value of the attracted capital is almost 1 million euros! However, not everything was as easy as it might seem, admits Normunds Kvilis, the CEO of the company.
First campaign failed due to its complexity. The company took into account the feedback it received and built a second campaign. “Digipulse” offers a storage place for inheritable digital assets. “What happens to your digital assets after your death? No one has access to them,” Normunds Kvilis comments the problem. “Our solution monitors the activities of active owners. If no activity is observed for a longer time, it informs the indicated heir.” Currently, company offers its first “alfa” version of the tool, but “lite” version will be available from January 2018. Conclusions and recommendations for those willing to launch their own ICO campaign? “If this is the case of just additional financial resources, don’t waste your time. But, if you have a product potentially useful for the blockchain community, try your fortune,” says Normunds Kvilis.
Success in new and traditional business always depends on different factors, but the most important thing is to achieve the client’s or potential investor’s trust. All participants of Rietumu Fintech Club discussion – Alexey Pospehov, Normunds Kvilis as well as Daria Dubinina, CEO of the startup ‘Crassula.io’, Mārtiņš Vaivars, co-founder of the startup ‘Toneboard’ and Edvīns Draba, a lawyer of the company ‘Sorainen’ - agreed that in fintech it is even more important. Trust usually emerges through demo versions of the products, ensuring the opportunity to test unfinished solutions and involving potential customers and investors in different manners. The development of new businesses, in its turn, needs governmental support in the form of legal regulation as well as so-called “sandboxes”, where fintech companies can test their solutions within the framework of existing infrastructures. Finally, Toms Kreicbergs, the moderator of the discussion and the head of the company ‘Indexo’ reminded the audience about security issues, which have to be assessed carefully in any new project and especially in fintech. He also encouraged everybody to think about a professional approach to publicity and media presence, as professional communication helps to build reliability and contributes to public awareness of the project.
Rietumu FinTech Club is a meeting place for professionals, investors and founders to discuss the opportunities and challenges in financial technologies. Rietumu FinTech Club meetings are organized by ‘Rietumu Banka’ in cooperation with the Latvian Startup Association Startin.LV. The meetings are held in the belief that financial technologies are widely considered to be one of the most promising businesses in future. This year, three Rietumu FinTech Clubs have already taken place and several events are scheduled for next year.
If you are interested in taking part in the Rietumu FinTech Club, please do not hesitate to contact us via e-mail to