There has been over 700 ICOs conducted in 2018 so far, more than the total amount seen last year. As the competition has gotten more fierce regards to reaching your fundraising target during the token sale period, it’s critical to make sure all aspects of how your ICO is conducted are on a good level to form a basis for successful project long-term. Here are a few guidelines to follow if you want to do that:
Evaluate if your business case is suitable to be moved forward with an ICO - essentially, whether it needs a token or not
ICOs should not be conducted just because your project needs to raise money fast and bypassing possible regulations that might need to be dealt with if you raised money as a traditional start-up. The token should have real utility for a long-term demand to be established and to make money for both investors and the team. If there is no practical use for a token in your chosen business, you should consider some alternative ways for fundraising.
Start building the product and plan the tokenomics & blockchain platform
Awhile ago you could raise tens of millions without an MVP or even a prototype, but since the ICO market has evolved, more and more investors want to see real value already built during the project before investing their money into it. Your product or platform should use your token and convince investors it is something the target market has a real use case for. If you are struggling to finance the initial product development before running an ICO, you could consider an equity investment offered for angel investors.
Regarding tokenomics, you should decide at least the following key figures before announcing the ICO:
- Hard cap
- Soft cap
- Total supply
- Token blockchain platform (82% of ICOs use Ethereum)
- Token utility, benefits and possible dividends
- How many tokens will be issued
- Token allocation
Conduct legal research preferably with a law firm specialized in ICOs
Unless you are launching your ICO in a country with no regulation, it is best to hire a law firm specialized in ICOs to help you navigate the ICO and cryptocurrency regulations (on top of any local laws of course) to make sure everything goes right and your ICO is run in a compliant manner. If you happen to make any mistakes in this area, not only might you face legal consequences but also it could happen that your ICO is marked as scam by the community and potential investors. This would be the last thing you want to happen to your ICO, as it is very difficult to restore that image once it is formed and people have already decided to stay away.
Write and produce the whitepaper and launch the ICO website
If you are familiar with ICO investing and have planned every aspect of your ICO carefully so far, a whitepaper written by the ICO team members is a viable option. On the other hand, if you don’t have that experience in ICO investing or otherwise working in the ICO space, it is strongly recommended to consider hiring a professional to write the whitepaper. Same goes for designing your website, as website design and coding skills alone are not enough for setting up a proper ICO website that is supposed to drive investments towards your project.
As last advice, start marketing efforts only after all your marketing materials are in mint condition to get maximum return on the marketing budget!