Nowadays Initial Coin Offering (ICO) is the biggest tread in cryptocurrency. The idea to presale crypto coin or token of a blockchain project has evolved as a crazy successful financial instrument to raise funds for the businesses. In this guide, we are going to tell you What is Initial Coin Offering and How to run a Successful Initial Coin Offering Process.
What is Initial Coin Offering?
For traditional companies, there are certain ways to raise funds for business development and expansion. One of them is Initial Public Offering (IPO). In IPO companies go public to earn funds from individual investors by selling shares of the company.
An ICO is similar to IPO. ICO is a fundraising activity for the companies which are looking to create a new cryptocurrency coin, app, or services. When a company launch ICO, interested investors buy the token or coin with fiat currency or preexisting digital coins. In exchange, the investor receives a new crypto token or coin specific to the ICO. Investors hope that the token will perform well in the future and provide them handsome return on investment. The company holding the ICO uses the investor funds to accomplish its goals, launching its product, or starting its currency. ICOs are usually used by the startups to bypass the rigorous and regulated fundraising process required by financial institutions or venture capitalists.
How to run a Successful Initial Coin Offering Process
Decide whether an ICO is suitable for your business or not
ICO is not a tool to quickly raise money without any effort. Before launching the ICO, the startups should ask themselves whether the ICO can be integrated into their business model in a meaningful way or not. If the primary goal of your ICO is to trade and exchange the coin, it guarantees that the price of your of your coin will soon crash. The only thing which can save your token is a strong demand for the token, the demand which is produced by the real utility. If your token is adding value to the real world, chances are high that it will be successful
Create an actual product
It is one of the most crucial steps which is ignored by the hustlers who are trying to raise capital quickly. Ignore this step at your own risk. It is essential to build a solid, secure, robust, and scalable product on the blockchain and tell how your product will change the real world.
Create a token or Coin
Tokens are like the shares of a traditional company which are sold to investors in the IPO. Before creating anything, it is important to decide how much funds you want to raise, once you decide how much funds you need. The number of issued token depends on your fund requirement. At this stage, choose how many coins you want to keep for the team and how many you want to sell within the Pre ICO to raise funds. It is also important to decide in advance in what scenario you will issue the additional tokens.
Platforms such as Ethereum, Waves, and NEO allow you to create your tokens without the need of building blockchain from scratch. The sale of the tokens is controlled by smart contract. To know more about check our post What Are Smart Contract?
It is essential to legally covered when you are dealing with other people’s money. To avoid trouble with regulators, you will need a legal description of the token offering, formal legal opinion, and what the investors will get from your token. Legal aspects of launching an ICO may vary from country to country so do your due diligence to comply with all relevant regulations and laws.
Whitepaper is a prospectus which clearly outlines the technical aspects of the product, the problems which it intends to solve, how it is going to solve them, details of the team, and description of token generation and distribution strategy. Whitepaper is a complex document which contains industry-specific details. It is not easy to create a whitepaper so it is better to hire expert professionals to write a perfect whitepaper. Whitepaper is a business plan, marketing plan, and a technical manual on which the success of an ICO depends.
Build your community
Building the community which supports your products is important for the success of your ICO. Until you do not have enough investors your token sale will not go anywhere. The majority of token sale derives by the real community investors which supports you and your token. To market your token, you can take the help of different marketing channels such as
- Cryptocurrency Forums
- ICO Calendars
- Social Media such as Facebook, Twitter, etc.
- Professional Network such as LinkedIn
- Influencer Marketing
- Media Coverage
- Paid Media
Launch your token
Once you have created your token, whitepaper, and marketing plan now its time to reach out to ICO exchanges. ICO exchanges enable people to buy and sell your tokens in the open market, so it is important to get listed on the most popular and established cryptocurrency exchange. While submitting the request to get listed on the crypto exchange, you need to submit some details such as
- Coin / Token name
- Trading symbol of the coin/token
- Coin logo
- Project and coin description
- Launch date
- Source code reviewed by the trusted third party
Once your coin is listed on the top cryptocurrency exchanges people around the globe can buy and sell the coin.
So there were some steps which you can follow for a successful Initial Coin Offering. We hope this guide will help you to launch your ICO project.
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