The crypto bull market is well underway, with activity in the VC and early-stage funding sector mounting over the last few weeks as the highly anticipated Bitcoin halving approached. And, as the post-halving phase begins, increasing numbers of new projects are expected to come to market in search of funding.
Yield App Angel Launchpad: Finding Promising ICOs Without the Risks
This article was published more than a year ago. Some information may no longer be current.
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Indeed, the beginning of this fundraising boom is already evident. In March, venture capitalists invested 52% more into crypto projects than in the previous months, according to data from RootData. Spurred by the success of spot Bitcoin ETFs and soaring crypto prices, investment into crypto projects soared to $1.16 billion in March. And this is just the beginning.
With so much excitement in the market, retail investors naturally seek opportunities beyond Bitcoin. Traditionally, Initial Coin Offerings (ICOs) have been one of the vehicles for those looking to move higher up the risk spectrum in search of outsized returns. A distant cousin of the Initial Public Offering (IPO), an ICO is a public fundraising method used by projects in the crypto ecosystem.
However, as 2018 showed, ICOs are far from a secure way to diversify portfolio returns. Indeed, an estimated 80% of all ICOs in 2017 were identified as scams, according to financial advisory firm Satis Group. Investors lost billions of dollars to ICO fraud back then. Now, as crypto fundraising ramps up once again, it is important to learn from past mistakes to ensure that this ICO boom is different.
The Role of Launchpads in Crypto Fundraising
Like any other early-stage fundraising strategy, crypto ICOs benefit from a platform that can help amplify their message and attract investors. This is where launchpads come in. A launchpad in crypto is a fundraising platform for new projects and their tokens. They offer a range of services, from token distribution to marketing, and from investor access to due diligence. As such, launchpads are a crucial part of the fundraising ecosystem.
Why are they so important? Well, for one thing, nascent projects often don’t have access to a wide network of potential investors. They have been busy building their offering, but often don’t have the time or money to invest in a marketing department, for example. When the time comes to raise funds, they require an avenue to connect with reliable sources of investment.
Launchpads serve as an intermediary between these projects and prospective investors. They can eliminate the daunting process of working out terms, distributing tokens, and ensuring all regulatory requirements are met. At the same time, investors looking to allocate their assets to an ICO gain access to a curated list of opportunities. It is a win-win for both parties. However, it is important to ensure that the launchpad itself is reputable and follows a rigorous selection process to protect investors from potentially fraudulent projects.
Security and Due Diligence
With institutional giants like BlackRock and Fidelity Investments getting involved in the crypto space, the profile of this industry is now vastly different from the landscape in 2018. However, even as blockchain gains prominence in the traditional financial world, investors cannot be sure that their assets will remain secure. The events of 2022 taught the importance of caution, as supposedly reputable entities like FTX collapsed, leading to billions in losses for retail investors.
Security and strong due diligence have been at the heart of Yield App’s offering since the very beginning. With a mission to unlock the best passive income opportunities for crypto investors across the globe, Yield App has always placed the safety of its customers’ assets first. To achieve this, it developed a proprietary, 135-point risk assessment model to ensure that any investment undergoes a strict due diligence process akin to what is seen in traditional finance.
This stringent risk model ensured that Yield App was one of the few digital wealth platforms unaffected by the collapse of Terra/Luna in May 2022, which set off that year’s crypto market downturn. This was because its risk framework flagged UST – the stablecoin at the heart of Terra’s collapse – as uninvestable well before the trouble began. Indeed, Yield App boasts an impressive track record of zero hacks or exploits to date – a commendable achievement in an ecosystem that has seen more than $7.7 billion in losses since 2016, according to DefiLlama.
Yield App Angel Launchpad: A Win-Win for Projects and Investors
This focus on security and wealth protection has led Yield App to launch its new Angel Launchpad – a platform that brings together reputable early-stage projects with prospective investors. Applying the same comprehensive risk analysis framework used for its other investments, Yield App’s Launchpad will seek out promising Web3 projects looking for funding and, crucially, ensure they are fully vetted before presenting them to its customers. This provides prospective investors with much-needed peace of mind when considering an ICO investment.
In addition, it is difficult for individual investors to discover promising ICO opportunities at an early stage, where the investment terms are most favorable. Indeed, private round sales are typically exclusively reserved for VCs and top funds. Yield App enables retail users to participate in these funding rounds at an early stage, alongside the most privileged investors. Yield App’s allocations are significantly larger than other launchpads – typically between $300,000 and $4 million – which means that every investor is guaranteed a seat at the table.
On top of this, pledge windows are not limited by the total raise amount. If the round is $400,000 (as it is with the first project to launch on Yield App’s Angel Launchpad, Me3), there is a seven-day pledge window where Yield App can oversubscribe the allocation. This way, no one is rushing to get an allocation and everyone gets a piece of the pie. It’s a fair system aimed at giving the small guy just as much of an opportunity as the big guy.
Yield App’s Angel Launchpad is a two-way street. While offering early access to some of the most exciting opportunities in the Web3 space to its users, Yield App also provides a platform to supercharge the fundraising efforts of the projects that pass its rigorous selection process, amplified by its strong community of more than 105,000 active users, with an estimated $20 billion in crypto assets.
In addition, selected projects gain access to top VCs, strong KOL support and introductions, and receive help with growing their communities. Yield App offers ongoing marketing efforts to raise awareness around the brand with the help of AMAs, PR and social media, while opening up access to its strong and wide distribution network.
Preparing for a 2024 Fundraising Boom
At this stage in the crypto cycle, investors typically rotate out of less volatile crypto investments, like Bitcoin, in search of higher returns. Indeed, this shift is already happening as long-term holders start to part with their Bitcoin holdings, according to Glassnode data. ICOs are one option to diversify portfolios and capitalize on the market’s growth. They can offer access to exciting opportunities that are unavailable in the open market.
As such, it’s important to be prepared as crypto fundraising ramps up. Yield App’s Angel Launchpad offers a simple way to access a curated list of promising early-stage projects, without the need to sink hours into the research and due diligence process. In our busy world, this could mark the difference between missing out on enhanced return opportunities and making the most of the 2024 bull market cycle.
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