Till now, I have discussed the basic concept of an ICO. I have told you what an ICO is all about, have given some statistics about why ICO is the future of generating funds for early stage startups, and have given credible examples to support the cause.
Running a successful IPO is no easy task, and companies consume the services of huge and highly specific teams for various tasks and upkeep. Similar is the case for an ICO. An in-depth knowledge of the fields of blockchain and cryptocurrencies coupled with a dedicated team of seasoned experts is the primary requirement of hosting a successful ICO. And, we are committed toward providing state-of-the-art resources, knowledge base and consultancy to its associated startups which would help them start off their product journey with a crowdfunding campaign via an ICO constructed and set up in a foolproof manner.
So, if you’re a startup with a brand new technology product and are looking for ways to generate a hefty amount of initial funds, better would be to stop hunting down angel investors. Rather, go for an ICO. And, we would be there to help you throughout the way.
Either you’re planning to host an ICO for your startup on your own, or are looking for services from companies, there has to be a checklist everyone needs to follow to have a very successful ICO campaign.
This is the same checklist that we use to guide you through a successful ICO:
- An understanding of the product / startup stage.
It is imperative to know the stage your product is at, and to understand the status the outside world would perceive your product to be at. Nowadays, even naive ideas are trying to go for an ICO. We say, if you even have the MVP (Minimum Viable Product) ready, you’ve stepped into the perfect stage to go ahead with an ICO for your product.
In case the entire product is ready for the market, the steps would be entirely different so as to ensure maximum market reach and visibility.
We already know how important the team behind a product is, while you approach angel investors or venture capitalists. Many times, a team forms the sole reason for a VC to go ahead with a round of funding. Having a good team, and specifically making every detail about every other team member public becomes all the more important in the case of an ICO. This is simply because people from across the world who are your potential subscribers wouldn’t get to know whether you are a real startup with a real product offering, or a fraudulent entity on a lookout to run away with their money — all of this is just because of the unavailability of a regulatory body.
So, help your supporters generate a great deal of trust toward you by giving them links to the social profiles of every member of your team so that the background and past experiences of each and every team member are open to the public.
3. Goals Ready
You need to make sure you have all your goals specified and ready. All of your goals and the vision behind them needs to be made public so that you can be held accountable for missing milestones, or diverting from your said goals. This increases the trust amongst your supporters and they know exactly what they are funding you for.
4. Investor Terms Ready
You need to clarify investor terms early on. This includes giving premiums to early bird investors and may be having an escrow wallet or any other kind of promising technological infrastructure to take care of the contributions. You also need to assure the supporters of a process to be valid for returning funds in case of a failure.
Let us take an example for understanding how to make the most of your relationship with the investors. If there are ten people who are contributing to your product early on, this implies that they are showing an interest in your product before hundreds of people have even got to know about you. This is commendable trust and needs to be rewarded. So, you might want to give some extra benefits or premiums to the early birds.
Secondly, you need to make sure that the investors understand how you are going to handle their money. What we suggest, and what we have also been seeing as a trend is to use a multi-signature escrow wallet. This enables you to allow access to the funds to people who are not involved with your startup, which guarantees safety to public money.
Lastly, you need to assure the investors about a refund process which becomes applicable in case you miss milestones or if the entire project fails.
5. White paper
A white paper is probably the most essential part in this entire topic — that is, toward a successful ICO. Since we are continuously mentioning that the entire concept of ICO is working because it enables product developers and geeks to directly tap investments, it is imperative that these geeks make the world know of the nitty gritty of the product. A white paper is a key element which has every detail — from technical to non-technical put into a document for the public. A good example is the collection of white-papers by EOS.io: https://eoscollective.org/papers/
6. The platform
We suggest you use a platform built specifically for the purpose of hosting an ICO. Such platforms work similar to Indiegogo and Kickstarter and aggregate crowdfunding campaigns for you to raise investments as well as for the general public to invest into several of those. They allow you to launch a digital token easily and quickly and at very less cost. This is way cheaper and easier than setting up and creating your own digital tokens. Such a platform also reduces the startup’s control over the token’s further development, hence decreasing chances of extreme volatility in the token’s value during the ICO.
This step is quintessential. Insufficient campaigning might lead to a big fail. And, that is quite obvious as until people don’t know about your ICO, there is just no chance they’d be coming to invest in your product. Extensive use of social networks and other communities and groups is an effective way of ensuring wide visibility, in turn resulting in a massive turn up to the crowdfunding.
The above checklist is a very rough estimate of the required steps for a successful ICO. Accomplishing a successful ICO run requires very specific steps with specialised knowledge coupled with practical experience.
Some points to be noted
- You need to take complete responsibility of an ICO. Any legalities need to be dealt with at your own risk.
- While investing in an ICO, proper judgement is required to differentiate between real people with real products and fraudulent people with fake technologies or products.
- As a startup, you need to understand whether ICO is even close to being helpful to you. Your case might not require selling digital tokens to raise funds, rather might prove to be useless for you. So, deciding to go for an ICO completely depends on the business model you plan to follow, and also how selling digital tokens is related to your basic workflow.