The popularity of ICO (Initial Coin Offerings) has soared in recent times. With investor-friendly mechanisms and the ease of raising funds, it has proved to be an innovative tool. However, since the field is relatively new and constantly evolving, there is a lack of a proper framework.
Some of the important factors to consider when launching an ICO
Check its suitability for your business operations – While there are innumerable tried and tested methods for raising funds, analyze if ICO is the right option. Do not just give the green signal to bypass the lengthy and cumbersome processes. Currently, ICO is undergoing a lot of transformation through the use of informal standards. The digital token should be integrated into your business model effectively. Since the competition is intense, speculation would play a major role behind the official launch of your ICO. This can be tackled through strong demand for your token. That requires a high utility for your token.
Develop a valuable product – While raising capital at an affordable cost is critical, it must not be done without building a viable product. Hence devote time and resources to create a robust, secure, and scalable product. Disclose its benefits and how it can have a big change in the industry. A little amount of equity capital would be needed to kickstart the business. Make sure that your token fits well into your product.
Launch a token – While figuring out how to launch an Initial Coin Offering, establish a valuable token. Be clear about the funds to be raised, the number of tokens to issue, tokens reserved for the team members, and distribution strategy for tokens. Fix a policy regarding unsold tokens and decide situations where you will issue additional tokens. Some popular platforms like Ethereum and Waves allow the creation of tokens without establishing a blockchain from scratch. Monitor the sale of tokens through a smart contract, which is a self-executing program.
Obtain legal advice – Since a huge amount of data and funds would be involved, make sure to be on the right side of the law. Ensure that your token is launched in a way that it stands out to be different from security. Describe the benefits offered by your token transparently. Choose an experienced legal advisor who has deep knowledge of the blockchain and cryptocurrency space. Keep in mind that the scope of the law would vary from one country to another. Hence, research to make sure that your organization complies with all the relevant regulations that fall under its jurisdiction.
Prepare a comprehensive whitepaper – It is a detailed prospectus that discloses all the technical aspects of your project. Include information about the benefits that you are offering, the description of your team members, strategy for distributing your tokens, legal implications, other terms, and conditions. Hire an experienced professional to write your whitepaper. Make sure that you eliminate jargon to make your whitepaper appeal to the common investor. It will lay the foundation for a successful launch of your ICO.
Indulge in marketing campaigns – Make your ICO launch popular through aggressive marketing activities. It will help in generating awareness about your project and promote your personal brand. Post engaging content on highly frequented discussion forums such as Bitcointalk. The feedback received will help you in correcting certain nuances of your project. Post your ICO on popular ICO calendar sites such as ICObench and ICOmarks. Utilize platforms like Reddit to find interested investors. Participate in discussions on various topics in platforms such as Quora. Professional clients can be reached through Linkedin. Build a healthy relationship with the media through public relations. It will help in establishing much-needed credibility. Stay in touch with your target audience throughout all the stages of your campaign. Once the countdown towards the official launch of your ICO shortens, you can hire well-known influencers to promote your product and grow your audience exponentially. Utilize paid ad tools on Facebook and Google to expand your reach quickly among different kinds of investors and end-users.
List your token on the leading exchanges – Buying and selling of your tokens will be enabled in the open market only by partnering with good exchanges. List your token on an established and strong exchange that can withstand market uncertainty. The process of listing will vary from one exchange to another. Tokens distinguished as security may invite regulatory action and consequent banning by exchanges. Every firm must submit the name of its coin, trading symbol, project description, launch date, and GitHub link. Make sure that the source used in developing the platform has been reviewed by an independent and trusted third-party.
While the peak of 2017 where ICO’s broke a huge number of records is over now, more companies are still seeking to maximize their potential through ICO development. This will eventually lead to cryptocurrencies being a greater part of the world’s financial system. While risks and uncertainty cannot be eliminated, it will lead to greater access and equality for all stakeholders involved.