Despite the gross abuse of Initial Coin Offerings (ICOs) by scammers, they are still the ideal approach to capital formation for Blockchain-based startup companies. Before 2018 comes to a close, ICOs have been able to raise $17.5 billion compared to the $3.7 billion collected in 2017. This means that more investors have faith in Cryptocurrencies and the number is growing exponentially.
ICOs are the easiest approach to raise capital as they bypass stringent regulations from venture capital markets, stock markets, or even crowdfunding approaches that have barriers to entry, especially for DLT startups. However, do not let the ease of use and lack of regulations misguide you into launching an ICO that does not match your needs.
Here are important factors to consider before you start:
- Develop A Utility Cryptocurrency
Initial Coin Offerings are one of the methods that allow Cryptocurrency holders to own Digital Assets along with trading on Crypto exchange platforms, mining, or accepting them in exchange for goods and services. Of course, the motive behind holding Crypto Assets is to sell them for a profit in the future. Therefore, when you are thinking of a launching an ICO, make sure that you promise investors to list the Asset on Crypto exchange platforms. This will be the silver bullet for success.
- Consider The Liquidity Of The Tokens That You Are Accepting
Sometimes, ICO developers accept Cryptocurrencies that are not liquid on Crypto exchange platforms. Ensure that you already have a wallet that can transact Crypto-fiat solutions to ensure that you have money to pay developers of your platform, legal fees, security tests fees, and even whitepaper writing.
- Let The Whitepaper Convey Your Idea
A detailed whitepaper can kickstart your ICO to a great beginning. Ensure that you have outlined important Blockchain information such as background problems, protocols, smart contracts application, security, data management especially for compliance with European Unions’ GDPR rules, the team behind the project, and ICO information such as dates, hard caps, soft caps, platform type, crowdfunding information, and the roadmap.
- Have A website And An Online Community In Place
Many investors judge an ICO by what they see on the website. Let the address end with xxxx.io. Ensure that you have complete information such as about, background, services, token, ICO sale, discounts, roadmap, and many more. Ensure that the information on the website is in agreement with what is contained in the whitepaper.
Additionally, open up accounts of your Blockchain platforms on Telegram, Twitter, We Chat, Facebook, or any other sites that have a huge number of subscribers. Ensure that from your end, there is a team of experts to respond to inquiries on a 365-day 24-hour basis to since your platform will be receiving inquiries from all over the world.
- Invest In Marketing
Research on the most successful ICOs and find out the marketing agencies that worked with them. Liaise with these agencies to get your ICO and Blockchain off the ground.
- Do You Have A Secure Blockchain?
A security break can wipe out all your gains in minutes. Work with the best engineers to design a hack-proof wallet and Blockchain platform not only to protect your proceeds but also ensure that investors are not prone to security risks.
A transparent ICO and Blockchain idea and a problem-solving strategy are factors what will make you achieve your hard cap target. Additionally, familiarize with the US SEC policies on ICOs just to be on the right side of the law since although ICOs are unregulated, there are investor protection laws in effect.