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Binance CEO Changpeng Zhao criticized venture capital fundraising while speaking at the BlockDown 2020.
Binance founder and chief executive, Changpeng Zhao, took aim at initial public offerings, or IPOs, and venture capital fundraising while speaking at the recent BlockDown 2020 conference.
Despite the recent decline in crypto investment, Changpeng Zhao, or CZ, expressed confidence that the blockchain fundraising markets will produce exponential growth in the coming years, emphasizing the boom and bust cycles of investment into other tech industries.
IPOs leave the public âholding the bagâ
Speaking at BlockDown 2020 on April 16, CZ described distributed ledger technologies, or DLT, as driving creative destruction in global fundraising practices, arguing blockchain fundraising has allowed individuals to raise money globally in a decentralized fashion for âthe first time in history.â
Binanceâs founder also criticized traditional fundraising methods such as IPOs, stating:
âInstitutional investors cash out, the CEO gets a big bonus, the retail guys get left holding the bag, and then the company [becomes] a really large public company, and the CEO takes big packages and then leaves, and then the government has to bail them out.â
Zhao added that traditional fundraising methods have been âplayed [for] too long,â emphasizing that âa lot of people know how to play it and they do game [the system].â
Blockchain fundraising to grow exponentially in coming years
CZ characterized the 2017 initial coin offering, or ICO, bull market as âtoo hot,â describing the recent decline in blockchain fundraising as an âoverreactionâ to the over-exuberant bullishness of the last ICO boom. He also notes the impact of the global economic slowdown on the broader capital markets.
âNow, we are definitely a tough market economically speaking,â he stated, adding: âThere is a lot of uncertainty, there is a lot of volatility, there is a lot of fear. So naturally, right now, it is a really tough time to raise money.â
Despite the recent slump, Binance predicts crypto fundraising will increase over the longer term, stating:
âI think [the] number of blockchain fundraising activities and the fund raised will continue to increase on a year-to-year basis over the next 10 [to] 20 years.â
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