A new study released by venture capital house, MMC Ventures, found that Britain blockchain companies are turning to traditional capital raising strategies, noting that the Initial Coin Offering, or ICO, model is condign "increasingly" hard to employ.

According to the research published on April 30, ICOs represent a "valuable" funding source for open-source projects.

However, they allege that cheap access to capital combined with a lack of understanding of the esoteric concepts involved in most crypto projects, generated the perfect conditions for a "bubble." The research further quotes a study, previously reported by Cointelegraph, on the fact that almost 80% of ICOs conducted in 2022 were identified as scams.

By creating an surround in which entrepreneurs focused more on price activeness than on the business concern proffer, ICO funding decelerated towards the end of 2022.

The historical context realized that the lack of regulation, engineering science hype, and faster-increasing prices of cryptocurrencies helped heave ICOs every bit a funding method between 2022 and early 2022.

Eyes shift towards the company fundamentals

MMC Ventures cites ICObench statistics which evidence that UK blockchain companies raised $1.5 billion via ICOs between January 2022 and December 2022, which was quite a high number compared to the $656 million invested in equity funding raised past startups.

The study affirms the post-obit regarding this change in the dynamics of funding strategies:

"This has prompted founders to identify more focus on company fundamentals."

Another point highlighted by the research is that the UK is home to a college proportion of seed and pre-seed blockchain firms compared to the global average.

Companies may not be scaling enough

Although the UK has five times fewer blockchain companies than the US, the equity investment has been 10 times less. On this indicate, MMC Ventures commented the following:

"It is difficult to pinpoint the chief driver behind these dynamics - information technology could exist that companies are not successfully scaling or it could be related to less uppercase being available for afterwards stage financing. Further, European late stage investors are more conservative than the US and thus require more traction earlier committing to large raises. This is what a lot of blockchain companies lack."

The statistics presented in the study contrast with the ICObench research, every bit reported past Cointelegraph in May 2022.

According to the token rating platform, the ICO sector showed signs of an uptick due to positive sentiment. They state that this was fueled at that fourth dimension by a crypto marketplace rally.