Initial Coin Offering (ICO) has proved to be one of the important fund-raising methods for startups. Through the decentralized blockchain technology and without any intervention of third-party financial institutions, investments can be received from anywhere in the world. In this article, we will see a detailed process of launching an ICO.
2 important stages in ICO launch
- Pre-Public engagement phase – This stage is where the project takes shape. The vision of the project is mentioned, and it takes around six months to 1 year, depending upon the scope and intensity.
- Post-Public engagement phase – This spans around three months. The announcement of the ICO project to the public and the actual sale of tokens will occur in this stage. Adequate effort must be made to ensure that the project grabs the attention of the public.
Steps to keep in mind while launching your own ICO
- Reflect if the project is fit for ICO – An entrepreneur can have multiple ideas for executing a project. However, his project must be fit for the target market and offer a viable solution. It should also provide a better value proposition than the competitors. The cryptocurrency offered must be unique and integrate well into the project to become successful in the market. Unnecessary use of tokens beyond a particular point will make investors lose interest in the project. Leading forums such as BitcoinTalk, AltcoinTalks, Reddit can be consulted for valuable feedback before going ahead with the idea.
- Analyze your competitors – The Crypto world is buzzing with new competitors emerging every day, creating an aggressive industry. It is important to offer unique services capitalizing on what each competitor is not offering. Flexible strategies should be in place to grab maximum funds from investors. Peculiar situations may emerge where a rival’s ICO launch can clash with your date and time. This is where special features must be introduced to make the ICO stand out.
- Verify if ICO’s are legal – Since many countries are becoming aware of the potential of cryptocurrencies, it is important to check if ICO’s are legally permitted in a country. There are plenty of cases where fake ICO’s have been unearthed, and collected funds have just vanished in thin air. Some nations such as China and South Korea have played it safe by imposing a blanket ban on ICO’s. Therefore, companies must ensure compliance with the local laws and regulations before launching an ICO. Close attention must be given to future changes in the law in nations that attempt to regulate cryptocurrency as an industry. To prevent incidents of money laundering, businesses must follow mandatory Know your Customer (KYC) processes.
- Tracking of monetary variables – Investments must be closely watched, and the source of funds must be looked into carefully. Every ICO development company whether during its launch or after its launch, must be transparent in disclosing their financial aspects such as dealings, transactions, expenditure, deposits, and withdrawals.
- Creation of an ICO token – Clear thought must be devoted before developing the ICO token. It varies from one firm to another, depending upon their requirements. Generally, the different stages for a token sale are private sale, pre-sale, actual ICO, and the general sale. The token must be designed, aiming at a high return on investment (ROI). A strategy should be formulated regarding the distribution of tokens. The number of tokens to be issued, how it will be distributed among the team members, how many tokens will be sold at each stage, and plans to issue additional tokens must be decided. Most of the tokens are generated through Ethereum’s ERC-20 facility.
- Writing a White paper – A technical document must be developed stating all the details of the project. Information, such as market analysis, development strategy, distribution plan for tokens, legal issues, description of the team members and investors, must be mentioned. A roadmap of the company and its goals for the future must be stated. Care should be taken to avoid flaws as every information is out in the public domain. If the website is launched in multiple countries, professional translators must be hired to modify the contents.
- Security – Utmost importance must be given to the security of the website. The company must invest in a reliable hosting service. Care should be taken to prevent hacks, distributed denial of service, phishing, and spam attacks.
- Protection against financial crimes – Every ICO should insure its investors against financial frauds. Detailed knowledge of the functioning and scope of regulatory authorities must be kept in mind. Investor’s hard-earned money should be protected against money laundering. As companies aim to increase the scope of operations, they should follow the tax laws of different countries. The founders may be held responsible if the laws are not respected by the firm as the financial system may be put in jeopardy.
- Marketing campaigns – A flexible marketing strategy must be developed for various channels. More efforts should be devoted to social media channels. Paid ad tools such as Google Ads can be utilized. Different presentation techniques are needed for various media platforms to grab the interests of the target audience. The hype created should satisfy the investor’s expectations. Constant communication with the audience during and after the campaign is essential.
- Creation of Bounty programs – Amateur users can be tapped as a useful source. They can be paid for promoting the ICO, maintaining threads, translation, posting on social media, and writing blogs. As time progresses, care must be taken to avoid over-usage of the Bounty program as experienced users might allege it as being over-the-top. At the end of the day, companies must be able to sell the product without paid promotion.
- Launching of the ICO token – The token, once created, has to be launched at the right time in the market and satisfy the investor’s needs. It must lead to value addition and create value. Every project developed may not be listed on every top exchange due to the heavy competition.
The cryptomarket is evolving quickly, and new dynamics are playing a big role in the market. All the above factors must be kept in mind by companies before the full-fledged launch of ICO.