In the past couple of months, it’s been hard to miss talks about Initial Coin Offerings or simply, ICOs. From the mainstream media to social media channels, the debate about ICOs and how they can help in raising funds to kick-start crypto-based projects have been gaining momentum. Ever since Mastercoin—a protocol that is developed on top of the Bitcoin Blockchain—raised over $500,000 in 2013, interest in ICOs has been gaining impetus with some firms even raising millions of dollars in minutes!
But what are ICOs? And more specifically, “how can a firm launch a successful ICO?” In “10 Tips for a Successful ICO Launch” we dive deeper to provide you with a sound understanding of how ICOs work and essentials of a successful launch. Let’s dive in.
What are ICOs?
An ICO is simply a “crowdsale”, where a company releases its own crypto with the primary aim of seeking to funds. During ICOs, a company issues a certain number of crypto-tokens which are sold to willing investors in exchange for cryptocurrencies or even fiat money. Accordingly, the company will obtain the capital to fund the product or service development while the investors will get their crypto-tokens shares and have a stake in the ownership of the company.
The first project to ever launch a successful ICO was Mastercoin in 2013. Since then, many other firms followed suit such as Ethereum in 2014 and Waves in 2016 that raised over $18M and $16M respectively. The fact that these projects were successful doesn’t mean any ICO will be successful. Successful marketing of an ICO can be a herculean task.
Essentials to launching a successful ICO
Blockchain technology provides a whole new world of automation and inclusiveness of investors in finance. For a to-be startup, there exist hurdles that must be overcome. In such instances, there are professional companies providing ICO launch solutions that are tailored to your specific situation. Such companies offer:
- Proper back-end infrastructure that supports the crypto-based project development
- Roadmap and white paper for the implementation of the crypto-based project
- Conforming to regulations to ensure there are no security violations
- Managing and maintaining the Escrow Account
- Marketing and Public Relations
Here is a summary of tips that are required for a successful ICO launch:
#1: Have a concise ICO launch design
A concise ICO launch design helps to explain how the crypto works, how the funds will be used, governance and compliance approach that you’ll use and how your investors will get their returns after the successful implementation of the project.
#2: Ensure you have a working a white paper
A white paper provides a roadmap for the implementation of the crypto-based project. It also provides the business, regulatory details of the crypto-based project with a step-by-step milestone plan and the technologies that will be used to implement the project. The whitepaper must provide all the required data in a succinct form to convince your potential investors that they are making an informed decision. Developing such a whitepaper may be herculean and as mentioned above, here you can take help of ICO solution company as well.
#3: Ensure you have conformed to security laws
One of the most challenging aspects of ICO Is the AML/KYC laws. If you are issuing crypto-tokens to known terrorists or even members who are on FBI watchlist, then you’ll be committing a crime. And because you’ll be committing a crime, you’ll be liable for economic and trade sanctions. However, there are certain jurisdictions where KYC/AML laws are easier to comply with than others. Just ensure you’re adhering to regulatory, legal and security laws to be on the safe side.
#4: Ensure you have the technical expertise for the development team
Ensure you have a team with proven track record of crypto-based projects execution. Such a team can help you figure out the feasibility and fruition of the product. The team should not only be technically sound and but should also have the required skills to implement the project. And it should be involved at each and every stage of implementation to ensure that all the milestones laid down in the whitepaper are achieved within the required timeframe.
#5: Keep your ICO Secure
Hacking attempts on known websites and crypto wallets have been rising in recent times. Just recently, a crucial exploit into a smart contract by Parity multi-sig wallet compromised over $200M in Ethereum where hackers successfully stole over $32M from the compromised wallets. In July 2017, an ICO for a project called the CoinDash was compromised where hackers successfully changed an ICO address resulting in losses of over $7M.
Therefore, if you’re running an ICO, you should be prepared for the likelihood of being a target hackers who will use all means at their disposal to steal user data and funds from your potential ICO participants.
#6: Ensure you have the proper technology
Decide on the platform that your tokens will exist. Waves and Ethereum provide a good starting point. However, you can also create your own Blockchain if you want the technology to be unique. Or if you feel Waves and Ethereum can’t implement the project you want to launch.
#7: Decide on the projected value of the token
Your investors may want to check if the tokens they are about to secure can grant a return on their investment. Ensure that the projected value of token to be issued matches what the investors are looking out for to help them assess incentives in the long run. Proper data on the number of coins to be generated should be provided. Some teams may opt for creating is regulated.
#8: Ensure your website communicates your bottom line
An ICO website should be created to focus on the event. It should provide all the information regarding the ICO that investors may want to know. Such a website should serve as a non-traditional website which can be closed after the ICO, or be converted into an investor portal.
#9: Provide the management team
The management team together with their proven track record to support Blockchain-based technologies and expertise in crypto should be provided. For instance, having experts in computer science, cryptosystems, software development, fintech assures the investors that they are investing in a credible and sound crypto-based project.
#10: Activate all the marketing and public relations channels
All the marketing channels such as Twitter, Facebook, YouTube, and LinkedIn should be activated to support the story for the shareholder and push the traffic to the ICO site. Other crypto-based channels such as Reddit and Bitcointalk are extremely powerful in reaching out to the crypto community.
Putting it all together
Executing a successful ICO isn’t a walk in the park. As you have read, a lot of preparation and coordination is required to make sure the crypto-based project to be launched secures as many investments as possible.