I've noticed many ICOs have to spend a lot of money on promotions and advertising.
For example, let's say an ICO raises 10 million dollars but has to spend 9 million on promotion.
Therefore, they only really raised 1 million for the project.
Isn't this unethical?
If you're starting a company and looking for investors the traditional way via stock equity, you would never spend 9 million or even 5 million or even 2 million in order to raise 10 million from investors.
This begs the question, what ratio of promotion cost versus funds raised for ICOs is ethical?
And how do we know if an ICO is using an ethical ratio?
In the first place, where would you gather an information concerning how much would the ICO spent on promotions? Because thinking about the matter, Projects aren't even responsible to fund the bounty hunters, in addition marketing transaction I guess would not going to price that high just to say, they've putted the right amount in marketing.
His numbers are funny to begin with. Who in the right mind will spend about 90% of their ICO generated funds to promotions and advertising (though it is just an example)? Most of them are after for the money, they will never spend that much in these campaigns. Most projects are paying their tokens because they don't have to spend anything, only the gas fee if it's eth token. As far as I know, there is no rule in terms of how much you want to spend with your promotions. It depends on your project plans.