ICOs, I don't see results.

That's the growing complaint among investors who are passionate about blockchain technology but frustrated with a lack of tangible progress on professional risk management strategies across major token projects.

"A lot of the projects that raise money, they're not really reporting what they are spending it on," said Meltem Demirors, founder of Athena Capital and chief strategy officer at the asset manager CoinShares. "I don't think you can responsibly talk about investing without talking about risk management."

While Demirors might sound particularly critical, her thoughts align with other investors in the space who have been grumbling about the management of companies and teams that raise funds from initial coin offerings (ICOs).

Yet this disillusionment hasn't slowed the race to get involved, with more than $6.3 billion raised through ICOs during the first quarter of 2018 alone – a sum which already surpasses the total raised by token sales in 2017.

Against that backdrop, veteran cryptocurrency investors are questioning whether many of these tokens actually add value compared to, say, traditional venture capital.

"What I worry about is, we still need to work out governance models with tokens," said Jalak Jobanputra, founder of Future\Perfect Ventures. When she can't tell what ownership, rights or utility the tokens represent, she would just rather stay safe with equity.

She said:

As Jobanputra pointed out, few projects that raised money in 2017 have proven the real value of their tokens by launching usable platforms. "I want to see them [token sale projects] start shipping products," she said.

While that might sound like a big ask at this stage – after all, the industry is building infrastructure for a new digital economy, a long-term endeavor – investors like Jobanputra would at least like progress reports.

"The projects we've invested in have reporting on par with startups I invest in, which [means] monthly updates on tech, team, [business development] and market progress," she said. "Successful founders have found that it is also a great way to enlist the collective investor network for help."

But this is all too rare, Jobanputra said.

"I'd like to see more reports to follow up on who is building products," she said. "How is this being applied to brick-and-mortar businesses?"

According to Demirors, self-reporting could help reduce trepidation and uncertainty among token holders. There are already standards for reporting and evaluating performance in the context of equity financing. The token economy needs similar processes to soothe not only investors, but also regulators who have been increasingly looking askance at the industry.

"If you're exposed to these networks and assets, how are you tracking that? How are you putting those assets on your balance sheet? Do you mark to market, to cost? What are the implications for tax?" Demirors asked. "These things have profound implications for the success of these projects and also the way regulators view this space."

Indeed, emerging platforms like the Brooklyn Project at ConsenSys and Messari, a startup founded by former CoinDesk CEO Ryan Selkis, are introducing much-desired crypto asset databases with information about token projects' resources and progress.

Another source of investor frustration is issuers' fixation on raising capital, which is merely one small step on the road to launching a new blockchain network, product or service.

"Everyone is so myopically focused on creating tokens and doing the ICO. They don't think about what happens post-ICO," said Demirors, who spearheads the new treasury management service at CoinShares. "A developer or engineer is not a hedge fund manager. They are not thinking about how to manage that money."

That's why Demirors, in her capacity as head of CoinShares unit CS Treasury, is working with startup clients, plus nonprofits like the Zcash Foundation that accept cryptocurrency donations, to manage budgets in a compliant manner while accounting for a decade or two of expenses on the horizon.

There's also a tricky balancing act. Investors want to make sure entrepreneurs are committed, so they may demand a lockup of tokens held in reserve.

But regardless of any single founder's personal holdings, token projects need to pay for salaries, taxes, legal fees, and a slew of other operating costs, so the funds need to have some liquidity. Knowing how to balance fiat funds with both long and short-term cryptocurrency holdings is crucial to the success of a company, Demirors said.

Because quite frankly, investors still want a payoff regardless of timeframe or philosophical alignment with the project.

Jobanputra said:

If the tokens are basically reduced to a digitized equity club membership, with investors buying equity in order to get discounted tokens for a quick flip, that defeats the whole point. Tokens need to be valued for their own sake, like equity, according to Jobanputra.

In addition to greater transparency and discipline, investors want frank conversations about the fact that the current surge in cryptocurrency markets won't last forever.

"It looks like there's growth, but it's really just a lot of fancy financial engineering," Demirors said, describing a recycling of capital throughout the community.

For example, she pointed to Blockchain Capital, a venture capital firm that invested in the Silicon Valley fintech company Ripple, which owns vast amounts of the XRP cryptocurrency.

"Ripple took some of that XRP and gave it back to Blockchain Capital. Blockchain Capital then turns around and invests it in Coinbase," Demirors said. "Coinbase now created a venture fund investing in startups Blockchain Capital is also investing in, who are then turning around and investing in startups with ICOs."

In Demirors' interpretation, such patterns suggest the industry isn't making as much money or attracting as much investment as the numbers might suggest. Rather, she said:

None of this is to say she's become bearish on tokens. Quite the opposite. Like many investors, Demirors demands high standards because she wants token projects to succeed.

"I'm very optimistic and obviously I love this technology or I wouldn't spend all my time on it," Demirors said, concluding:

Bitcoin bubble image via Shutterstock