7 Steps to launching a successful ICO (Initial Coin Offering)
The cryptocurrency space is explored by thousands of new people every single day. This topic is discussed everywhere, you simply can’t avoid it. Guess what – you shouldn’t! Blockchain age is upon us and it is truly the very beginning of a new era in the world of technology. If you are reading this, then it’s obvious that you side with that school of thought. More than that – you want to take your rightful place in the cryptocurrency universe as soon as possible! If you are determined to get into the world of ICOs specifically, make sure that you get a better insight into the subject at hand.
What is ICO?
First and foremost, ICO stands for initial coin offering – a fairly new concept of crowdfunding where companies release their own cryptocurrency and sell it to the buying audience, who get crypto shares in return and enable the chosen company to bring their project into life with raised funds. Most commonly those share tokens are exchanged for Bitcoins and Ethers. The biggest advantage of ICO is also it’s the biggest flaw. Virtually anyone can start an ICO thanks to its availability and the opportunity it gives in raising money without giving up any company ownership to the investors. Because this business model is unregulated by the government, there are a lot of scammers and shysters who are breaking the law without batting an eyelid, so be especially cautious when engaging with the campaign creators online! You must also understand that ICO can be unsuitable for your own startup projects. Although there’s plenty of success stories, a lot of people spent tons of time and money to ultimately fail at this complicated business launching process.
7 Steps to Consider
- The first commandment is really easy to understand! The currency you are intending to sell must closely correlate with your product, so it could maintain it’s value after getting put on the market eventually. Presenting a quality product is key to survival in the crowded ICO world. Your commodity must instill a lot of confidence in your backers. It must have a well-defined purpose, a real value for community and a room for further development, as those factors decide how well received your goods will be in the long run. If you are only interested in getting rich – people will see it from a mile away and won’t give the project any substantial support. You can’t blame them for that approach. The Internet is not the place for blind trust and unlimited faith, especially when money gets involved.
- To win the crowd over you must be honest with your own self, have sincere intentions and indicators that would endorse your promises and assurances. You should make your blockchain project beneficial for everyone involved! A good marketing team would help you overcome the initial scepsis of the unconvinced and critical masses. Speaking of teams, you would have to assemble one! If there’s only one representative behind the so-called revolutionary concept, people won’t bother and will dismiss the opportunity to invest in the idea. It is a cold and hard truth. Make sure you get someone who’s a part of the blockchain council and avoid working with people who you have no prior experiences with. To evoke trust in potential investors you have to be 100% sure in your own partners!
- Despite the relevancy of the industry, the whole system is still “in the works”. It’s a normal situation for a new concept of such proportions and importance that is still growing, but that is also a factor that may threaten the prosperity of your own business. In order to build a successful campaign, you should learn from those who failed and from those who won! Analyzing the landscape that you will build upon should be the first thing on your mind, as it’s the base that gives stability to your future creations. Lack of knowledge may result in huge losses, so it’s essential to recognize every little detail before setting your product up for everyone to see. If you have something valuable to offer and you cater it on a solid foundation – you are on course. Keep in mind that you are one of many who seek for financial assistance, thus being well-informed about the industry is crucial. Not only your grasp will help you with the execution of the operation, it will attract those who click on the pages of your website. Education will only add patrons to your queue. Your knowledge surely will never scare them off!
- You must be prepared to face a lot of adversity and dedicate a big part of your time to interactions with the community. You must give a lot of attention to the audience, as ultimately it is the hand that feeds your project. In order to sell you have to pitch ideas that would give your ICO some much-needed acceptance, so it is vital to have a vision that extends beyond the initial process of launching the initial coin offering. Your plan should be as detailed as possible, all the specifications of the project matter! The direction of your business is up to you, but have a look at the strategies that paid dividends before and build your goals and strategies for them. Those who have learned from past mistakes of others are doing much better than those who are new to the industry and can’t be asked to do some basic research. As Benjamin Franklin once said: “By failing to prepare, you are preparing to fail”! This statement couldn’t be truer when you’re getting ready to launch your activity as a business, so follow the advice of that wise man!
- After you have created a team, built a strategy, designed a product, the next step would be to create your token. You need to create an asset that can be represented by any tradable good. This step is not that energy-consuming, but nevertheless a critical one, as without the token your business would have no chance of surviving. They are not that dissimilar to shares the companies sell in the initial public offering operations. It is important to set a clear financial goal and have a cloudless understanding on how you will spend those tokens after getting them. There should be no spontaneous expenses, every little payment should be a part of your spending plan. Etherium and Waves are just some of the platforms that grant you the possibility of creating a token. Their sale is regulated by a smart contract – a protocol that simplifies, verifies and enforces the execution of discussed terms and conditions between parties in the most efficient manner.
- You should entertain the idea of getting legal advice before pushing on with the whole pre-sale process. You are taking a massive responsibility by getting people’s money for needs of your own project! You better be covered constitutionally if someone will assume your motives are dishonest. Description of the token is required to explain his true purpose and to reveal what customers can get from buying it. There are established legal firms that operate specifically with the ICO projects! Legal aspects of the launching process differ significantly from place to place, so it’s necessary to understand and follow the rules of your particular region. After getting a legal consultation you should proceed with preparation of the whitepaper. It is a document that clearly defines the goals and objectives the project is planning to accomplish, explains the strategic movement of the subject and descriptions the technical details of the operation to the investors. To put it shortly, it is a business plan that legitimizes the operation of initial coin offering.
- For the deal to develop smoothly you have to put in a bit more work. We already mentioned that you need to interact regularly with the investors, so that there would be enough exposure and buzz around your concept! Even the greatest idea from the best team can get lost in the shuffle. In order to prevent that you would have to create a lot of advertising for it. You can spark the interest of backers, but you should also be able to maintain high attention levels from them for an extended period of time. There are several examples when ICO projects started out flashing and sparkling before fizzling out due to lack of attraction. It is your duty to pitch it in a manner that will keep the investing side captivated. A good way to keep your token sales active is to give them a lot of promotion on ICO forums and other cryptocurrency oriented outlets. All that’s left is to establish your token on exchanges! For people to be able to buy and sell those tokens you have to register them on the established exchanges that would add some validity to your assets.
If you stick to those seven steps your chances of having a successful campaign increase dramatically. There’s no guarantee that your campaign will be a success, but if you comply with the aforementioned steps, there’s less risk for you to make a big mistake. You can’t ignore ICO forever – it is the future! And the future is now.