It’s a start of a new era, Initial Coin Offerings and Cryptocurrencies are making the talks loud in the so-called crypto-space. The new paradigm which came into existence just a few years ago unlocked many new dimensions and opportunities for the start-ups and down the lane to quickly reach the pinnacle among their competitors. The year 2017 created a buzz on Cryptocurrencies and Blockchain technologies as the funds raised was over $3.6 billion digital tokens in just a short span of time. Just take a closer look at the funds raised in 2017 on VC in blockchain that touched $295 Million (till June 2017) & $187 Million (Q2 projected) whereas in ICO it was $327 Million (until June 2017) & $291 (Q2 projected) and the total funds raised was a massive $3,611,293,912. These ecstatic figures show how ICO’s are globally adopted by many early investors to fuel their investments rapidly and instantly.
Challenges the traditional investment routes present to start-ups
To begin with, venture capital (VC) A.K.A equity funding is the traditional approach to raise funds for a potentially naive project. The capital funds are contributed majorly from Banks, Investors, Financial institutions and many more.
The core challenges of VC include:
- Venture capital investments and ownership: when considering VC, the primary ownership is lost as the VC investors become part owners of the business. And, as the company’s 60% share is with VC, they are involved in all the major decisions that you take.
- Return on Investment (ROI): Conventional VC firms anticipate high ROI than expected. Clearly, they focus on the profit and purpose of the product that is likely to hold more success for a long time.
- Avoid Risk: VC firms are a bit hesitant to take any decisions since both the owner and the VC investors should agree with the ideas of the project and its risks. And, they are reluctant to sign any non-disclosure agreement which can put you and your business at a high risk.
- Time Frame of the Investment: Most VC firms release funds gradually with the development of the naive product. So, you simply can’t expect the whole lot of funds getting to you at once. It is a tedious and a tentative process.
Advantages of ICO:
- Quick funds: ICO’s are swiftly being replaced by VC’s. Whether it’s a startup in technology or technology behind a startup, ICO’s accelerate funds in just a little time rather end up selling stakes in the company. Perhaps, let’s begin with the stats because at the end that’s what matters the most. Storj, a cloud storage provider had a successful token sale of all time and they raised a staggering $20 million within just six hours of timeframe. Isn’t it a groundbreaking figure?
- Interpret the timeframe: The time frame is shorter when compared to the mundane VC model. Usually, an ICO sale happens after two to three months of scheduled groundwork. In general, an ICO lasts approximately for four weeks.
- Invest in the future product: ICO is considered best when investing in the future products. Because you still can get the fair share in return once you are ready to launch the product.
- Democratization: Anyone from any geographic location can participate in an ICO. ICO doesn’t need a physical communication rather everything is online. You just need a laptop or a desktop, internet, and some Cryptocurrencies. You are good to go.
Things you need to know before starting an ICO:
By now, it is clear that ICO can fetch more profits at a faster pace. After analyzing the above pointers, it is significant for you to know the ins and outs of an ICO and below are the Eight Sutras to consider before you launch a successful ICO campaign.
- ICO and your business: Don’t Jump on the bandwagon right on! Take steps one after the other, ICO’s are not for all. Delve and plan into the values of your product and know how it caters your audience.
- Start preparing your goals: Without a proper direction, you could easily get lost and probably end up wandering what you are actually expecting from an ICO. A proper roadmap documents such as whitepaper (a blueprint of your naïve product) explains the specifications, technology, and architecture behind your product.
- “Pro” Team: A robust team of tech-savvy experts can handle ICO projects like a pro. Try including profiles of the team members on your website and link them to all the social media networking sites. These small points can take you a long way and this is probably one of the best ways to build confidence and trust with your partners.
- The magic tools: You now have a great team already working on the product. Try to explore the latest ICO tools, you can easily get them online and choose one according to your requirements. As per the stats, ICOBOX and BlockStarter are on the top and they offer legal, technical, marketing, and consulting services. Go on! Try checking these tools right away!
- Checklist and Pricing: Stop right here. Work on the regulations and security violations strategy twice!! Don’t be in a hurry because these factors can cost you more in the future. When considering price strategy, think about your goal and choose the appropriate model as per your needs.
- Safeguard your investors: Yes! You heard it right. It’s not the product that you are trying to sell; you’re trying to showcase your team’s talent on the product. Investors help you promote your product. Always keep that in mind. There are 3 safeguarding techniques. Discounts ( at the initial stage), Escrow wallet ( A digital wallet to hold project outsiders), and Fund return ( Support your investors as per your return policy)
- PR and Marketing: It takes two to tango. Communicating your product in various communities helps in rolling out your product smoothly. Every business is different. Ensure you adopt unique techniques to approach the end user it can harvest astronomical results. Be transparent when marketing your product. Honesty and ecstatic-statement posts give exposure and open up new prosperities to venture your product into the online communities.
- How to bypass the fence: Make sure to stay true to your audience throughout your ICO campaign. Fraudulent and spam activities can happen any moment, know your risks and get a lawyer onboard before you even start the campaign. Know your progress and keep yourself updated.
Based on the above thought process, to launch a successful ICO you should first zero out all the pointers discussed in this blog to extract the maximum output in the campaign. Leverage the thought process and strategy involved in each step and just remember! We are always there for you! From the conceptual designing phase to launching an ICO, We cater adept services as per your requirements.