PRESS RELEASE: Crypto experts believe ICOs will account for 10% of UK firms’ capital raising by 2023

11 Jun 2018

Cryptocurrency initial coin offerings (ICOs) will become a significant fundraising route for companies seeking growth capital in the next five years, coming to represent over 10% of all capital raised in the UK, according to results of a new survey by the law firm Collyer Bristow.

Over half (57%) of respondents, comprising investment managers, fintech entrepreneurs and business owners, believe that start-ups will turn to ICOs in increasing numbers as they look for alternatives to more traditional capital raising methods like private equity and venture capital.

They anticipate that at least 10% of capital will be raised by this route by 2023, and that the UK is well-placed to benefit from the trend, with 60% of respondents saying the City of London could become the primary market for ICOs in the next five years.

The vast majority (83%), however, believe the UK needs to introduce tougher regulation to the sector to ensure its success, while only 3% believe that ICOs can ever replace private equity completely.

Nigel Brahams, partner at Collyer Bristow, said: “Our research suggests that we are witnessing a small revolution in how start-ups go about growing their businesses. However, regulation remains a concern, and many companies we speak to want greater clarity from the FCA, which to date, although broadly supportive of new technology (i.e. through the sandbox), has only provided a limited steer as to how they should be viewed through the regulatory lens.

“We would like to see the expansion of light touch regulation in this space, so as to support the legitimacy of ICOs. Indeed, we would like to see the City of London become the global leader in this type of capital raising. ICOs are unlikely to replace private equity or venture capital. But cynics should be in no doubt that, much like the disruptive technologies of the dot com boom 20 years ago, they are here to stay.”

Contacts

Collyer Bristow

Telephone: (0)20 7470 4503

Francesca Palmer

Citigate Dewe Rogerson

Telephone: (0)20 7638 9571

Caroline Merrell/ Lizzy Kittle/Nick Reading

Notes to editors

1. The survey of 30 investment managers, blockchain lawyers and fintech entrepreneurs was carried out among attendees of Collyer Bristow’s event: “ICO vs. PE: Which funding model is best for growing business?”, which took place on 10 May 2018.

2. The event explored the pros and cons of these emergent funding models with a distinguished panel, comprising leaders in PE, VC and ICO funding and also senior representatives from firms who have successfully raised money using the PE, VC or ICO routes.

3. Collyer Bristow LLP is a London-based law firm providing a comprehensive range of advisory, transactional and litigation services to commercial organisations and wealthy individuals and families.

4. The firm’s highly experienced lawyers provide expert corporate and commercial, dispute resolution, employment, intellectual property, private wealth, real estate and reputation management services.

5. The firm and many of its individual lawyers are ranked in both Chambers and the Legal 500 directories.

6. The firm has an office in Geneva which supports its private wealth and international practices.

7. The firm has been championing emerging talent in contemporary art for thirty years. It supports and promotes artists through its in-house art gallery and independently curated exhibition programme.

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