1 min read

The shareholder problem

The vast majority of companies are privately held. You can't just go out and buy shares of the company because it isn't publicly available on any stock exchanges. If the company is specifically looking to raise funds and you happen to be a well connected venture capitalist, you might be able to buy a few shares. Companies usually have to reach a certain level of success before they can be publicly traded.

As soon as your company is public, you face greater scrutiny. There are laws that require certain information be shared publicly at specific times. Shareholders want to ask you questions and generally pick apart your business to determine if they can make a profit with your stock. The money you can make by going public is great, but it's not a decision to be taken lightly. If you're not careful, you can get too focused on share price and distracted from building the best company possible.

Cryptocurrency is often compared with stocks, but it's quite different. Stocks represent a company and the price generally follows how well the company is doing. Crypto is not backed by a company's earnings, and it doesn't entitle you to information.

Launching a cryptocurrency is a necessary step (in many cases) to fully decentralize your project. Developers with legitimate applications or protocols shouldn't shy away from offering a token, but it's important to recognize that your investors will be asking for regular and detailed updates. Various community members will enter the chat strictly to complain about price, marketing, delays, etc.

Many of the downsides of being a publicly traded company extend to cryptocurrency. If you're building something for blockchain, delay launching your token when possible. This will allow you to establish credibility before the critics start feeling entitled. The important thing is to take the feedback without letting it get you down. Just keep building and communicating proactively.


P.S. Communication is the real hack here. Share updates frequently about your priorities, progress, challenges, etc. Don't worry about the price of your token. Don't worry about the critics. Just build (both your app and your community).