I have raised VC, PE, and debt. Early-stage and late stage. Here's my take on "ICO vs VC."
ICO's:
For the investor, they are akin to commodity futures trading. The underlying value of the token is nil, as is the degree of control over the underlying property. But returns from price speculation can be very rich.
For the issuer, they have the money virtually without strings attached. There is no other form of assistance and no loyalty implied in either direction.
For example, I'd be shocked if there were positive "operational" returns from a token like the Brave coin. For that to happen, Google, Facebook, and the rest of the ad industry would have to grant sanction to the vendor of a Chromium-based browser startup yo turn the entire industry on its side. I doubt it. Seriously.
VCs:
For the investor, they get some modicum of ownership and control of the underlying property – sometimes not much but usually a lot. There is an implied responsibility to help with follow-on funding, but nothing solid. The investment is risky but not speculative.
For the issuer (of preferred shares AKA the company), they get the money with all kinds of strings attached. If the VC is top-tier (e.g., Fred, Kleiner, NEA, etc.), significant branding, easy intros, and many other benefits can accrue. If the VC is less prestigious, the operational impact is more neutral. (No VC can make your company grow or be successful – that's on you.)
My opinion:
1. If I could pull off an "ICO" (bad name) at my next company, I'd do it immediately. Great upside and little downside.
2. I say "immediately" because I don't think that this vehicle will last long in its current unregulated state. There will be failures. There are enemies. There will be evil deeds (fraud), and those deeds will involve unaccredited investors.
3. The ICO will be a short-term speed bump to VCs.
4. That all said, who wants to join me and start an "ICO production" company to create the coins and infrastructure for them to do their own ICOs? Speed is life, and I know some VCs... :)