A reflection on token-backed vs. traditional VC financing

In the last years, token-financed projects became popular due to the lack of regulations and crowd appetite to become early participants. Token-based investments are usually based on an open source project that aims for early user participation and lures investors with a token of their own. The value is to be shared among users and not among large shareholders and venture capitalists (VC), as has been the case in the past. But, unfortunately, this format comes with a trade-off that has not been stressed enough in the past. So read on. — Authors: Raphael Hagemann, Enrique Munoz de Cote