Tokensales, ICOs and crowd sales.
All of these have become popular way to distribute cryptographic tokens and to fund startups in this space.
But what about IFOs?
Here we’ll look at what Initial Fund Offerings (IFOs) are and a closer look at the platform behind them.
A Bit About CrowdWiz
Before we examine what exactly an initial fund offering is, its useful to give a bit of background to the platform which is providing them - CrowdWiz.
CrowdWiz is a decentralised investing ecosystem. Under the slogan “investing liberated” it is seeking to remove intermediariess for the financial investing space. These intermediaries include underwriters, fund managers, investment bankers among others.
Each of these intermediaries currently retain a percentage of any deal when an entrepreneur is seeking to raise funds. CrowdWiz seeks to eliminate the intermediaries and make it possible for entrepreneurs to raise funds directly from investors for their ventures.
In the past such direct fund raising was often viewed as inefficient. It was difficult for entrepreneurs to easily access investing capital at the scale that was required. OF course there were entrepreneurs that would raise funds from their personal network, but this was still a niche approach.
Decentralisation has changed that making it much easier for groups of people to aggregate their captial without the need for a centralised body.
So, this is the first aspect of CrowdWiz. Providing a decentralised platform which connect investors with entrepreneurs eliminating intermediaries in the process. This allows entrepreneurs to raise capital quicker and at more favourable rates. For investors it is a way of gaining access to deals earlier and with better returns.
This is not the only aspect of CrowdWiz that makes it interesting. CrowdWiz also has interesting way of selecting the investments that are made.
It uses what is called the Wisdom of the Crowd. This means that it is the group through a decentralised voting mechanism that decides what the fund should invest. Users of the platform that hold WIZ tokens are able to establish their own funds. The members of that fund are then able to participate in voting in order to decide what that fund will invest in.
The idea being that when a group makes a decision together the results are typically superior to any one person making the decision. This is because the group is able to pool all of its knowledge and expertise into making the decision.
Which brings us to Initial Fund Offerings.
What Is An Initial Fund Offering (IFO)?
WIZ token holders are able to establish their own investment crowds. Once a crowd is setup they can then issue their own specify token for that crowd to fund enterprises. These crowds can choose to either follow a mutually agreed upon investment goal or to raise capital for specific projects.
Other users of the CrowdWiz platform can then choose to participate in that IFO by exchanging their WIZ tokens for the token not that crowd.
In many ways this works similar to the mechanism that most people who have participated in a traditional Initial Coin Offering (ICO) will be familiar with.
In a typical ICO you identify a new blockchain project that you would like to back. You exchange your existing cryptocurrency usually either Ethereum or Bitcoin for the token that is being issued for the project.
In an IFO the same process applies accept everything is conducted within the CrowdWiz ecosystem and what is being exchanged is the WIZ token.
Once a user is participating in that particular crowd, they will be issued with a number of designated crowd tokens, proportional to their investment. These designated crowd tokens will give them voting rights and a share in the profits from that crowd. Each of the IFOS will have specific parameters which have been established by the owner of the creator.
Some examples of these parameters includes the hard and soft cap, the method of voting and number of investors among others.
If an IFO is able to attract its desired level of investors and capital then the crowd is created and the new token is issued to its investors. The WIZ tokens which were raised will be added to that crowd’s wallet. If the crowd does reach its desired goals then the investors will be returned to them.
Participating in IFOs
The first step to participating in IFOs is to be a WIZ token holder. WIZ tokens are being distributed as part of a crowd sale. To learn more about the WIZ token sale visit:
CrowdWiz Website: https://crowdwiz.io/
