Many individual investors in ICOs cry fraud or scam.
Yes, there have been scams, but above all there have been many projects that failed, just like 80% of startups that do not make it past their first two years.
The problem in 2017 and 2018 was the huge number of crypto projects being launched, combined with an influx of individual and inexperienced investors who had a short-term view.
The market collapsed, and the projects with it, because of this appetite for short-term gain and because of manipulation by some players.
The people complaining the most today are those who had this short-term vision. They are the same kind of people who wanted to make quick hits in 2000 and killed the market.
Building businesses takes time. You need good teams and all the stars must align at the same time. It is hard and, above all, risky.
Many founders were also inexperienced and not suited to building a startup project.
Regarding ConnectJob, where I was an advisor but not a shareholder or team member, the project failed because its leaders were not suited to a project of that scale, because a major investor pulled out at the last minute despite signed contracts, and because the fundraising was insufficient to keep such a project alive.
It is a sad story, but there have been hundreds like it over the last 20 years. From the outside, I saw no abuse, just a very serious lack of professionalism.
It is a case that brought nothing to its founders or advisors, all of whom came out with zero, whatever some rumors may say.
An article was posted that summer by its founder. I think it is insufficient, but it explains well what happened.
As someone outside the project, I am not here to defend them, and I do think they made several serious strategic mistakes, including a clear lack of communication with their investors. I simply want to explain that this could have happened in any startup. This does not excuse the mistakes of its leaders, but every investor must know that they can invest in poorly managed companies.
To everyone who asked me directly whether they should invest in this project or any other ICO, I gave the same answer: these are very interesting, very ambitious projects, but they are early stage. Above all, they are risky projects. The white papers were often impressive, as rarely seen in startup history, and I have analyzed more than 20,000 business plans over the last 10 years. But that is not enough. Everyone must make their own choices, analyze a project alone, and take their own risks.
The founders of Skype, despite their exceptional success, launched a new project after selling the company called Joost. The company raised $45 million and was meant to become an online television platform. Who still remembers it, even though it was the most hyped project of the moment? The company failed within a few years despite the quality of its founding team and the money raised. Investors lost everything.
How many companies built Uber-like services with similar platforms without managing to break through, only to collapse after years?
I have never advised, and will never advise, anyone to invest in an ICO or a startup, even when I am convinced of their future success. Quite simply because conviction is not enough.
Among the hundreds of startups in which I invested at an early stage, and in which I was always convinced there was great potential, one is worth more than $2 billion, two are worth around $1 billion, several others more than $100 million, others more than $10 million, but the majority of companies in which I invested are worth zero.
Value creation for successful companies took years: five, seven, ten years.
If you want to invest in a startup, consider it a potentially lost investment. That must be clear from the start. In the middle of all this, rare gems will emerge and make their investors rich. It is not for nothing that investment in our sector is called venture capital.
Some will call it playing the lottery. It does look like that, even if, of course, investing in a startup can also create jobs and potentially projects that solve real problems, and the odds of success are still higher than winning EuroMillions.
Rare gems are rare, and many people spend their lives searching for them. Do not be surprised if you have not discovered them yet.
Good luck to all.