Successfully closing a round of funding is a major boon for any company, regardless of the sector or market they are active in. But once that funding has been received, time is ticking down until investors want to see a working prototype of some sorts. Failing to deliver on that promise will see companies go bust, and Bitcoin startups may very well suffer the same fate.
Company Funding Comes At a Premium Price
Whenever a company secures a round of funding, there is general excitement from both employees and investors alike. Money is a key element when it comes to developing the next big thing that will revolutionize the world as we know it. However, there is a certain level of time pressure to take into account, which is also the determining factor to make or break a company.
Funding does not necessarily have to come from high-profile people active in the business world either, mind you. In this day and age, it has become much simpler to find funding through crowdfunding platforms like Kickstarter and Indiegogo. In exchange for their pledge, backers will – usually – receive a physical reward.
Unfortunately, those rewards are not always delivered, or at last, not as promised. Take a look at Robotic Dragonfly, for example, a project that raised over US$1m through IndieGogo in 2012. Fast forward to today, and the company behind this project – called Techjet – finds itself in major financial trouble albeit it is technically speaking not their fault.
Not all of the pledged funds has been released by Paypal and Indiegogo, although it remains a mystery as to how much funds are still in the wrong hands at this time. However, the fact remains none of the Robotic Dragonflies have shipped so far, and Techjet is not the first – nor the last – company to become a victim of their own success.
Crowdfunding always carries a certain risk, and it is unfortunate to see so many Indiegogo backers falling victim to a company’s bad management. That being said, crowdfunding is never guaranteed success, and despite the best efforts of crowdfunding platforms, these scenarios will happen every so often.
Bitcoin Companies With Funding Need To Deliver
These same principles apply to Bitcoin companies all over the world, most of which have secured some form of funding. Even though funding is not a guaranteed formula for success, although it certainly helps to get the ball rolling. However, investors are not the most patient crowd by any means, and Bitcoin startups need to keep their responsibilities in mind.
Over the past 24 months, there has been a massive influx of VC funds into the world of Bitcoin. That being said, hardly any of these companies are even close to a finished product right now. While there is still time for these companies to get their act together, things need to start happening sooner rather than later.