Preparing for any STO, like the ICO, should be divided into major steps, each of which directly or indirectly affects the marketing campaign as a whole.
1. Preparatory stage.
Here we shall place all necessary preparations before STO:
– Private Placement Memorandum and White Paper
First, the formation and writing of Private Placement Memorandum and White Paper, which includes both a general and technical description of the project, as well as a detailed description of the token model and tokenomics, the financial model of the project, business-plan, market research, project risks, roadmap and various details about the project that are described in any good PPM and White Paper.
It is important to understand the fundamental difference between White Paper for ICO and White Paper for STO. First, project descriptions should be aimed at professional, accredited investors who have already met with such documents more than once, for example, while investing in IPO companies.
And in this regard, your descriptions should be a certain mixture of Investment Memorandum (familiar to the venture capital market) from a financial point of view of the project and WhitePaper (familiar to the IT community) from a technical point of view, project description.
Simple “conceptual” eulogies and promises of a “revolution” in the industry with an extensive list of technological advantages, as often happened with the White Paper of most ICOs, are not enough,and they are absolutely meaningless for STO investors. Roughly speaking, if the ICO project description is a language of concepts,and ideas, then the STO language is a language of concepts, numbers,and benefits.
– Tokenomics and Financial Model
We should also note that the principle behind the establishment and description of the tokenomics model and attracting investment model is more complex than in the ICO. And you need a truly professional and integrated principle that will be closely combined with the legal side of the project and STO. If mass PR and a large marketing budget often dragged out even for dubious concepts at the ICO, then the STO investor, first of all, need the most detailed and reasoned rationale for how the project will work from a financial point of view and at whose expense it will earn money for the investor. If this unit is prepared by the project team by itself, in the future, you should definitely give it to an audit of third-party professionals. This side of good projects often suffers, but they’re winged and blinded by the idea. Founders understand this too late.
– Website and other materials
For many investors, project’s website will be one of the first points of contact with the project, and it should be of standard. The website should be well-structured, answer all the basic questions, be a kind of hub representing the company where all the necessary materials and links can be easily found. It should inspire confidence.
The structure of a good website is carefully thought out and logically leads the visitor from block to block, closing one fundamental question after another, followed by a call-to-action (for example, subscribing to news). Another insignificant, but nonetheless difference from sites for ICO — in most cases English is more than enough, since the target audience of STO, regardless of where it is geographically based, are fluent in English. Asian investors, even large ones, may not always speak English. However, if you are going to translate your website and materials in any language, please do not use the “bounty” trick; you need a professional translator who understands the specifics and context, with further testing on the local community.
Also, don’t forget about formation and creation of more/other preparatory materials: Pitch Deck, One-Pager, Investment Teaser and other documents necessary for the promotion.
– Complex approach to all the above
Ideally, when one outsourcing company performs all work: from helping with writing and editing White Paper to creating content for a website. Often, individual outsourcers are not strongly involved in the subject of the project and at some point may not understand its key benefits; make mismatched materials, putting not quite correct accents in content and design. Plus, you will spend a lot of time, constantly explaining and presenting your project to new outsourcers.
2. Legal framework
The legal framework should not go unmentioned, although more about this term will be revealed in one of the following articles. During the process of creating all the materials that are described above, when the basic concept and tokenomics is already clear, a technical task is created for the team of lawyers accompanying the project. It is critically important to connect lawyers at this stage, because the last versions of all materials and marketing strategy largely depend on the regulation of the country where the issuing company is registered and on the regulation of countries where it is planned to attract investors. In the following, lawyers must go with the company at all stages of STO, including accompanying and preparing dealings with large investors.
3. Choosing a bookbuilding platform
This issue indirectly related to our topic. During the preparatory stage, it is also necessary to choose a bookbuilding platform that meets all technical and legal requirements. There will be an investor’s dashboard in which he can register and log in through the website where he can undergo the KYC/AML procedure and invest. In shorthand, since this is also a separate topic, I can say that we also partly relate this issue to marketing, since the platform’s convenience, and intuitiveness plays a huge role in the platform itself, and all rules integrated into it should be as comfortable as possible for the investor and not cause failure of trust.
MARKETING AND PR CAMPAIGN FOR STO
When the first three items are ready, we can start a marketing campaign. We should start preparations ahead of the game, during the all materials creating process, gradually developing a strategy and preparing a springboard for a quick start by the time of finalizing the first three items above.
In the marketing campaign of ICO, the main goal is to attract attention and reach as many retail investors and enthusiasts as possible, to create a huge community, including using the tools of bounty campaigns and airdrop.
The target audience is different in STO (although accredited investors invested in many ICOs). The marketing campaign should be focused primarily on experienced, well-educated in financial matters professionals of the investment market.
These are people who are less inclined to make decisions only based on the hype around the project, but they trust more elaborate and reasonable calculations and rational arguments.
Therefore, our main goal is to show credibility, show all the benefits and help them conduct primary due diligence, without hiding possible risks.
We will also distinguish the marketing campaign into several main items, each of which can be supplemented or modified individually for a project.
We start with social networks. We can’t say that there is a linear dependence on working with social networks and attracting professional investors, however, in the analysis, almost any fund pay attention to the dynamics of the project’s popularity, the size of its community, and the communication within it. In other words, it is rather an indirect factor in estimation of the attractiveness of the project, but the necessary one.
Each social network has its own design requirements, and each page of the company should be properly framed.
As a standard, we recommend companies to have their own pages at least on:
For our clients, we regularly create and update the content plan for two weeks ahead and make posts adapted for the social networks from one post per day to one post per two days. The regularity of social networks is an important aspect of SMM strategy.
It stands to mention about the answers to community questions in each of the social networks, both in comments and in personal messages.
The community managers responsible for this should respond quickly. During the preparation and training of community managers, an internal FAQ is created in advance, which has the main possible questions and answers, and which is updated until the end of the campaign.
The standard for the speed of response within our agency, which we put for our community managers working with projects, is 2–3 minutes maximum for answering a personal message or a question in Telegram-chat and 5–7 minutes maximum for answering a comment under a post or on the forum.
Separately, I want to touch upon a question of blogging. The most universal and popular blogging platform is Medium. The main purpose of the blog is to give detailed answers to all questions, from the most important to the secondary.
Detailed posts are needed to prove the experience of your project and its team members (especially the CEO and CTO) on your industry issues, explaining all the investment and legal aspects of your STO. Constant updates on the company’s news, the implementation of the STO and its processing, the progress in technical solutions and project development, as well as reflections on the industry and interviews. Do not forget that even an extra reminder of yourself and the project, especially in the context of progress, is better than its absence.
The materials in this blog can also be used in the maintenance of other social networks, in which the main posts are usually more adapted to the right platform, and must also be used on thematic platforms where there is also a crypto and investment audience, such as Reddit, Steemit, Bitcointalk, etc. Among other issues, it will give a huge real coverage for your publications.
In this case, it doesn’t matter how and where the first or second contact with the client occurred, the main goal of the blog is to interest and build an open and confident relations with a potential investor.
Your YouTube channel is the place where your potential investor can see the company face-to-face. There may be standard promotional videos about the company, the project and technology, as well as answers to frequently asked questions, demonstration of the concept/product/service, interviews with team members, recorded speeches from conferences, live Q&A/AMA sessions, etc. Regarding the video part, it is a good practice of small videos (often animated) briefly and clearly explaining the essence of the project.
AMA and Webinars
Honestly speaking, the webinars are not always effective. Having a video with answers to the most frequent and most important questions, complementing it with new videos with deeper meanings on your YouTube channel is a more effective method.
But to conduct regular live AMA sessions, as mentioned above, is very important. They can be alternately carried out in different networks: Facebook Live, YouTube in video format and Telegram in video or text response format. This will help to expand the network, and give the participation effect. I note once again that regularity is needed for such sessions. There are projects that carry them out once a week, often with different team members. The community does not always grow so fast that a sufficient number of non-obvious questions would have accumulated in a week, but at least once a month, the AMA is necessary.
After that, the most important and interesting questions need to be translated into the text and, as a result, the AMA is posted on social networks and used in an e-mail marketing.
Community engagement and Telegram chat
Bounties and airdrops are senseless — STO orients towards professional investors, and although large social networks are always good, this is the case when quality is more important than quantity. Plus this method of attracting potential investors by distributing tokens will be legally prohibited in the case of STO.
One way or another, supporting marketing activities — such as maintaining a community, are necessary. If we have reviewed the support and maintenance of the community in the main social networks above, here I want to separately touch on the Telegram chat of your project. There is no need for a huge chat, and many STO investors may not use Telegram actively as a means of communicating with projects. But there are three important factors that many leave out of view, saying that Telegram chat is not needed for STO:
- You should never forget that besides tokensale the company has a product/technology/innovation/service on which the company is built, and this construes the consumers of these resources and services, the company’s clients. Their actual or potential quantity is important during making an investment decision, because the demand for a company directly affects the future incomes of investors. And the more of them, the more they are active in all social networks, including Telegram chat, the more chances to attract one or another fund.
- The situation which we faced many times in the ICO campaigns. There is a huge number of “silent” investors who may not be directly active in the project chat, but are actually a part of it. They monitor the activity and project responses to the questions of the rest of the community and respond to positive and negative outbursts within the chat.
- In the industry, directly or indirectly related to cryptocurrencies and blockchain, everyone has been accustomed to Telegram chat projects.
The ideal scheme is when you can attract users of your product, so-called product evangelists, and investors into your community. Often, they are the same people.
STO is not a rapid short marathon, as has often happened with the ICO. Here we need the most informed approach and the more it is serious and well-prepared, the greater the chances for a successful outcome. Never neglect the demonstration of growing demand.
PR remains one of the most important key pillars on which the promotion campaign is built. For many companies in case of ICO, PR was built on advertising of the tokensale itself, now the best option is when people find out about you, about your technology, become interested in you, and then they find out that you are going to STO.
On the verge of the ICO splash, we tried to cover them with mass, get into all possible crypto and business media, but in a situation with STO, quality and accuracy are more important. Also, do not forget that in many regulations security tokens cannot be advertised directly, and here you will need to lure potential investors with your ideas, story, values, innovative approach and so on. A PR campaign, like any marketing activity, must also be further coordinated and moderated by lawyers.
Each project can be divided into several PR-components of topics that can and should be covered:
– STO itself, as a fact of carrying out. Often, projects erroneously stop on this stage, first trying to advertise, to sell their tokensale;
– Industry in which the project operates. This is a hyper-important thing, any serious investor will look not only at tokenomics and financial model, but also at how the project can take its place in the niche, and more specifically win market share in one or another industry. In STO, as in classic venture, this directly affects the potential incomes of the investor. Industrial media exist in almost every niche, they often have a more professional look and approach and an expert article can play a good role in your PR campaign.
– And the third thing is technology itself. Whether a blockchain, AI or something else will be applied, it is also worth writing about it in the context of both technology and industry: what innovation your project brings, how it can change industry, how technically it will work. Such articles, firstly, will show potential investors the seriousness and scale of technology adoption, and will attract more technologically versed followers who may come in handy.
Accordingly, the best option is to combine all three (and in some specific cases, there may be more of them) and serve in different mass media with an emphasis on the relevant topics.
The publications also can be divided into the main four types:
– Global Tier 1: large publications in the business media like Forbes, Bloomberg and so on . They are read by a huge number of people, one way or another connected with the financial industry, entrepreneurs, investors, experts, etc.
– Crypto-media, large and medium scale, such as, CoinTelegraph and Bitcoinist. They are read by the crypto community, including numerous retail investors, industry and projects experts and a smaller, but nonetheless considerable number of large crypto investors, various crypto funds and institutional institutions.
– Tech media, such as HackerNoon and WIRED, are respected by the IT community. In fact, the audience of such media does not end with geeks and IT specialists. There are huge layers of various communities, including funds that are interested in new technologies. And many projects often forget about publications in such media, but they play a big role and always have an effect on potential investors who will monitor the project before making a decision.
– Industry media, as discussed above.
The ideal time to start PR activities is as soon as possible. Often, even before the announcement of the STO, thereby forming in advance the primary database of people interested in the project.
It is a very important tool in both the short and long-term strategies. First, e-mail marketing allows a potential investor not to monitor the social network of the project and many of them will not do it all the time, and the current social networks feed may not show some important posts to the investor. Plus, many of the STO investors may not be the most active users of social networks, but they use e-mail for sure.
It is important not to be too intrusive. 1–2 letters per week in the beginning and middle period of the marketing campaign will be more than enough to keep the investor informed of all events. Weekly Report is required, which will collect all the events, posts, progress and so on, made during the week. This will give the investor confidence that the process is underway and at the same time he will not need to regularly monitor social networks in search of news about you. Once a month it is worth making a Monthly Report summarizing all the results made in a month and announcing the goals and important milestones of the next month. Plus, you must separately send critical updates and messages that are not always possible to predict in the process of building a content plan for e-mail marketing.
And using a subscription to an e-mail marketing, we can encourage our potential investors to go through the KYC procedure on our bookbuilding platform as early as possible, which will also later have a positive effect on the tokensale. Properly constructed e-mail marketing with good copywriting and content plan is a very effective tool.
Roadshow, conferences and meetings with potential investors
The blockchain and crypto conferences have already experienced their splash, but there are key pillars where it is often impossible even to advertise STO/ICO projects directly.
For example, the Consensus multiple-day conference, held annually in May in New York. An extensive community gathers for such events, where you can find partners, experts,and investors. Plus, around these conferences there is a separate after party market, often sponsored by the projects themselves, exchanges and various companies related to the industry (for example, at the last Consensus, one of the loudest afterparty was arranged by Ripple, where Snoop Dogg appeared). On such more private and entertaining events, the most interesting networking takes place.
However, currently there is no clear market for thematic STO conferences. In the meantime, general and large blockchain conferences with renowned organizers and even more eminent CONFIRMED speakers can well become a suitable place for the presentation of their project, networking and partnerships. (I highlighted the word “confirmed”, because sly pseudo-promoters may post a list of invited speakers, among whom may be people of the first magnitude in the industry, but their participation is not confirmed (and never will be), in the end,you will speak and walk among a few similar projects and service sellers).
As for the private roadshows that have become standard,and aggressively promoted in the ICO market, their effectiveness has fallen dramatically in the early to mid-2018.
Often you are taken to a country where the local “investors” actually just offer their marketing services in the region. Sometime, it happens that the organizers in general overtake the actors with a list of questions to the projects (true story, I faced such meet-up in Singapore).
Each project wants an individual approach, as well as every investor wants more individual conditions and the opportunity to discuss them.
Nowadays roadshows are similar to talent shows, where everyone should try to perform better than others and, having paid a solid fee, bout fights for the right to go to the next round — a meeting with an investor among those invited by organizers.
In my practice, I have had few such prefabricated roadshows actually worked in either direction. It is not important the mass of events, but their accuracy.
Choose a region — right funds, arrange personal meetings. Review who from the funds invested in similar projects, both in the classic venture capital market and in the crypto market. And write directly to their representatives on e-mail or LinkedIn.
But before that, let me remind you once again about the number-one clause of our STO plan. It is important to form and arrange the correct investment offer, because most likely you will not have the right to a second attempt with investors and funds.
Professional analysts should conduct an audit of your offer and your materials, adjust them depending on the objectives of the project and get feedbacks on them from experts and investors with whom they have partnerships. In the future, these materials are possible to send for funds, arranging for personal meetings and calls. And within this framework, such letters are one of the main channels of communication with institutionalists.
The services of IR professionals are also important — those who have live contact with foundations, who know how to build primary communication and organize private meetings. Contacts of professional investors are available in the public domain, on the same websites of funds and LinkedIn, because direct viewing and screening of projects are their work and bread and butter, but you can imagine the number of those who are breaking through these doors. Therefore, the services of a professional IR-manager with a good track record of transactions will greatly facilitate your path.
Paid advertising on Google and Facebook.
I will not dwell on this topic in detail, since the materials promoted in these grids and the advertising campaign to the bottom largely depends on the technical and legal component of the project. However, advertising STO head-on is not effective and legally unsafe. Your targeted and contextual advertising should attract potential investors and users by the project itself, its technologies and scale. Campaigns of this kind should be compiled by professionals and very carefully and individually worked out separately for each project, its advantages and concept. Otherwise, there is an opportunity to spend impressive enough money for nothing, and what’s even worse is to incur legal problems.
Another one effective tool for promoting STO is working with the influencers. These are people who have a fairly large base of followers and are reputable in the industry. They cannot and should not directly agitate to invest in your project, but they can tell about the benefits, mentioning the STO campaign.
In this industry there are four main types of influencers’ presence onsocial media: YouTube, Twitter, LinkedIn, Medium blogs.
Nevertheless, many are not limited to this; you should always look for the resources to which people listen. At one time, for example, Spreadsheet-Influencers were popular among ICO investors, who had conducted their own scoring of projects according to different parameters in Google Docs tables.
What the influencers can do? They can make project and technology reviews, an interview and/or an AMA session with the founders and the projects team, personal scoring and rating. Sometimes it may be enough to mention of the project in their social media. The main is these actions should look as organic as possible within the framework of the influencer’s activity, and really arouse the interest of the audience. Many opinion leaders quickly lost their authority by advertising of projects too obvious.
Advisors and Experts
ICO has generated a whole industry of pseudo-advisors. More often than not, they were just individuals on project sites. Nevertheless, a real advisor can advise both corrections in one or another aspect of the project, and make the necessary introductions with the necessary experts, funds, media, etc.
Look for experts in your industry and professionals in various aspects of STO and the technology used by the project. Ask them for direct participation in the project, a video review or an article about you, not only permission to place his photo on the site. Don’t forget that the contribution of the advisor is a smart investment in the project, and quality is more important than quantity.
STO/ICO trackers, ratings, and calendars.
In the best times, there was a direct relation between a good rating on a large ICO tracker and investments. Now it has more presence effect — formal, but though compulsory. They keep it convenient for many investors — it is possible to quickly review basic information about the project, compare it with competitors. There are investors who look in detail at the ratings given by large and well-known platforms. In certain situations and in certain communities this may affect the credibility to the project.
Is it harder to raise funds from STO in comparison to VC, ICO?
Yes, of course, on the one side, to attract the investments to STO is more difficult than to ICO at the cost of there are qualifications on the quantity and quality of attracted investors, interdictions on the use of certain materials and formulations during the marketing campaign. But this makes your tokensale legitimate from all sides, and your investors — protected and more confident.
At the same time, on the other side, this type of token is easier to sell effectively, because real benefits for investors don’t need to be hidden under the layer of often illusive utility, and the success of a tokensale largely depends on the profitability of the offer and trust to the company and its founders in general.
How to leave in the new reality.
Everything doesn’t stand still; the industry is progressing and changing. Previously, the biggest problem for investors was the absence of regulation, the so-called Wild West market. But this time passes, making tokenization a more legitimate and safer type of investments, which will undoubtedly lead to a large quantity of interested investors and open more legal opportunities for attracting investments for real, honest projects.
And this, in turn, is an undoubted win-win situation for both parties.
Thanks for reading this article.
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