Initial Coin Offering is a very popular way of raising funds for cryptocurrency startups. On the one hand, the increased interest to ICOs among investors, be they individual business people or companies, means a huge amount of potential funding for you if things go well. On the other hand, there are some examples of ICO being used for a scam and outright criminal activity, so investors tend to be overly careful when deciding what to invest in. To get their interest, you need to prove that your project is trustworthy, which can be relatively difficult.
In this guide, we discuss how to run a successful ICO, share the list of the most important things to look for during ICO planning, and provide some advice on gaining your potential investor’s attention.
What Makes a Successful ICO
Keep in mind that all those factors that ensure any business model success are equally important for cryptocurrency projects as well. Make sure you put enough effort into market research, competitors analysis, a well-drafted business plan and marketing plan. However, there are a couple of things we would like to mention when it comes to ICO projects.
A Team Of Professionals
To launch a successful ICO startup, you need to work with people who have already had some experience with blockchain technology and cryptocurrencies. There is also a marketing benefit to gain from hiring professionals: if you openly show the resumes of your team on the website or social media, your project will seem more credible in your investors’ eyes.
A Precise And Clear Goal
Like any other project, ICO should have its set of goals and objectives, except that with ICO you should not just define the precise goals for yourself, but also make them clear to your investors. This is done through documentation like roadmaps and whitepapers.
The roadmap is a plan of your ICO, a document that explains what your project is going to do during the different steps throughout its “lifetime”, from the project’s conception to its launch.
The whitepaper is a document that describes your ICO project in detail. It includes the problems you want to solve, your objectives, future plans, etc.
Communication With Investors
Remember that ICO is a type of crowdfunding, so making your startup attractive for investors should be your foremost concern. Consider making a website, as well as a topic or a page for your project on several cryptocurrency-related resources, and, most of all, the community management team. The team will manage the inevitably huge number of questions from the investors, deal with things like foreign language translation, and generally provide comprehensive communication with people participating in your project.
A Word About Security
As you’re dealing with potentially large amounts of money, you should think about the security of your startup. It would be better to hire a professional security engineer who has already dealt with cryptocurrencies and ICO, but in case you can’t afford one or just want some guidelines, here are some ICO security tips:
- Be sure to buy not just the name of your new domain, but also those that closely resemble it. The hackers can try to scam your investors by faking your website and making them use their site instead of yours.
- Same applies to the social media accounts, although to a lesser degree, as they aren’t directly dealing with money. However, there are still many ways criminals can harm your startup through the social media (like leading users to fake pages), so better be safe than sorry.
- Constantly monitor your website for any attacks or authentication problems, as the site is the part of your project that is most likely to be attacked.
- Create a set of security rules, along with the description of the most common scams, and publish them openly on your site and social media.
- Use two-step authentication and other mechanisms to make authentication safe.
How To Attract Investors
Any successful ICO strategy includes the way the startup interacts with its potential investors. As your startup completely relies on your investor’s funding, this is one of, if not the most important things to focus on if you want to launch a successful ICO.
Think about due diligence
Serious investors, especially big companies, will definitely do a due diligence to know if your ICO is a good investment. Try to learn the trends of ICO: what attracts investors, and what discourages them at the moment. As always, hiring professionals for writing you a whitelist, and other openly available documents is a good idea.
Be Ready To Answer Questions
Considering all the uncertainty that surrounds cryptocurrencies, be ready to face a never-ending torrent of questions from your yet-to-be investors, as they have no other way how to know if your startup is really trustworthy. If you want to attract a lot of people to your ICO, you should be ready to answer each and every question.
The most common question is ‘why do you choose to work with blockchain instead of some other technology?’, with the questions about security and pricing not far behind.
Create A Community Management Team
Long before the ICOlaunch, you should think about those people who will be responsible for dealing directly with investors. If your project ends up becoming popular, you’re going to deal with hundreds, if not thousands of messages, as well as attention from different media and press outlets, and this isn’t something that the members of your existing team can cope with in the meantime.
Several Simple Tips On How to Have a Successful ICO
Create a Prototype
Your successful ICO strategy should definitely include creating and running a working prototype. It can be a deciding factor in your startup success, as the investors are more likely to give their money to somebody who can prove that their ideas work.
Run a Pre-Sale
Running a pre-sale with bonuses for early investors can be beneficial for your startup, but you need to carefully consider the number of bonus tokens you’re willing to give. After a certain point, this strategy becomes counterproductive, so try to think ahead and establish some threshold.
To start a successful ICO is not an easy task, but with the right approach, it can be very rewarding. Mind the basics, adapt fast, and it might be your startup that will join the list of the super successful projects like Bitcoin or Ethereum. If you have any more questions about ICO or cryptocurrencies, you can always contact us.