Are you looking for an answer to the question of how to launch an ICO successfully this year?
In this article, I aim to give a few tips on how to launch an initial coin offering so that readers can ensure that their initial coin offerings raise the maximum amount of money.
I aim to give a complete overview of the main stages and to highlight a few of the dangers that you might face along the way. This information should give you a clear understanding of the work and timeframes that an ICO campaign entails.
How to launch an ICO?
Don‘t be fooled into thinking that launching successful ICOs is easy. While it is true that in the past some companies launched an ICO after only putting in a minimal amount of effort, the ICO market has become really sophisticated in a very short space of time.
Due to the recent spate of scams related to ICOs, many countries around the globe have begun cracking down on them. Some countries have even gone so far as completely banning ICOs altogether. Investors have also grown weary of poorly planned ICOs and now generally avoid them like the plague.
Decide whether an ICO launch is the right action for you
First thing first! Should you launch an ICO? You need to consider various questions to decide on this, and these questions are as follows:
- Should you use blockchain at all? Blockchain is a promising technology, however, it’s not a magic pill to solve all business problems! Can you deliver your proposed business functionalities using other available technologies? Blockchain is right for you if you need a decentralized P2P network with a distributed ledger.
- Do you need to offer a cryptographic token? Can you create a viable economic model for these tokens? If you can, then a cryptographic token makes sense for you. I have discussed this in our guide “What to plan for when undertaking blockchain software development?”.
- Does your jurisdiction consider cryptocurrencies legal? If it doesn’t, then you need to take the legal preparations first before you plan your ICO compaign. Remember that crypto regulations are dynamic and evolving. Read “Cryptocurrency regulations around the world” for more insights.
- Are you launching a cryptographic token with utility values only? Then an ICO works for you. On the other hand, if you are promising increasing returns to your investors, then you are likely offering a security token. You should check the security regulations in your jurisdiction. I have discussed this aspect in “Utility tokens vs. security tokens comparison guide”.
Understand the Cryptocurrency Market
Those companies who have already built their own cryptocurrency or have invested in cryptocurrencies like bitcoin should already understand most of the key aspects of how the cryptocurrency market operates.
On the whole, investors are likely to already be part of the cryptocurrency community so will be familiar with the process of buying digital assets already.
You will obviously need a good understanding regarding the mechanisms behind cryptocurrencies as well as what kinds of selling points appeal to the investors who use them. Being able to identify the unique selling points of your ICO will help ensure that it is a successful one.
Commenting on his highly successful ICO, the CEO of COBINHOOD Popo Chen said “To me, it’s about building a solid ICO project that aims to solve these pain points in the industry. COBINHOOD is supporting the cryptocurrency industry while helping the people within it”.
Create an OUTSTANDING White Paper
Today‘s investors demand thorough and well explained ICO white papers. Granted, there are still a small number of investors who jump in and buy up sackfuls of crypto-tokens based on nothing more than marketplace hype, but because of recent high profile scams, few are willing to take that risk.
A good white paper should sell your ICO without ending up looking like a marketing paper. A white paper should actually be more like a science paper in that it should clearly identify a problem before giving a credible step by step solution to the problem.
If your paper looks like it is all marketing and no substance investors are likely to suspect it as being a scam.
If you have never created a white paper before then you should think about investigating some of the ICO launching services that are out there. Since so much rests on how well investors respond to your white paper, you really need to make sure that it is truly outstanding so as to make the biggest impact.
Keep the following in mind when creating an ICO white paper:
- You must present fully original content in the white paper.
- The white paper must explain your technology solution without using jargon.
- You need to show a roadmap of your blockchain product so that investors know when your project will go live.
- If you are using a relatively new flavor of blockchain technology, then you need to show how you are mitigating the risks arising out of new technology.
- If you are already developing your product, then your white paper should show the status of your progress. You should also provide the code repository so that potential investors can judge your progress.
- Explain in the white paper about the steps you took to comply with the applicable regulations.
Questions you need to answer in your white paper:
- What is the problem you aim to answer?
- What is the solution to the problem? (Needs to be well presented and logical)
- What market do you intend to focus on?
- What is your business model?
- Do you have an effective marketing strategy?
- How much money do you need your ICO to generate?
- What happens if you don‘t meet your fundraising target?
- How much will each token cost?
- How can they be purchased? (bitcoin or other altcoins etc.)
- What is the long-term value of these tokens likely to be?
Other things to consider:
- Is the ICO well-presented including graphs etc.?
- Is it written in a way that best appeals to investors?
- Have you explained your product properly?
- Are the estimates and goals given in the ICO white paper realistic?
Get legal advice
Before launching your own ICO it is important to seek proper legal counsel to make sure that you are fully compliant with the laws of whatever country your company is based in.
The penalties for not abiding by these laws vary from country to country and could even include ending up on a terrorist watch list should your ICO be identified as being used by known terrorists. Don‘t take the risk; get solid legal advice before you go any further and make sure that you can launch a successful ICO.
You can also use the advice/services of your legal expert to help you create your ICO‘s terms and conditions.
Make sure your team is the right one
Not only do you need a project team that has all the expertise and experience to successfully launch your ICO, but you also need one that is capable of projecting an image of confidence to investors.
Building the best ICO development team is probably the hardest part of any ICO launch. You need individuals who believe in your idea and are prepared to dedicate both their time and reputations on its success.
You will need to include pictures of all the team members in your ICO to ensure that it appears open and genuine. Including a picture of your entire team together in your office space is also a great idea as it serves to reinforce public investors that your team is real.
Hire expert developers for your next project
1,200 top developers
us since 2016
Choose the best ICO launch platform
The next thing to consider is which token technology you will use for your ICO. The vast majority of companies choose to launch an ICO on ethereum due to its suitability for this purpose. Since the ethereum platform is focused on using blockchain technology to create digital contracts, it has helped to make ICO launches easy and straightforward. It takes only a few minutes to create Ethereum ERC-20 Tokens that can then be used for your ICO.
Need help with developing your product on Ethereum? We at DevTeam.Space have just the right expertise you need! To judge our expertise, read our guide “Blockchain software development using the Ethereum network”. In this, we have covered the entire gamut of developing on Ethereum, e.g.:
- Basics of smart contracts and “Decentralized Apps” (DApps);
- Ethereum development tools;
- Development, testing, and deployment of smart contracts;
- Creating cryptographic tokens on Ethereum.
There is quite a wide range of options out there to help you run a token sale. As a result, you will need to do your research to find the one that is best for you. Using a good ICO tool to help is also an option.
BlockStarter, for example, enables your company to share your ICO concept with a large worldwide blockchain community. These companies and individuals can then decide if they wish to jump on board and help with your ICO.
Plan for code audit
Many of your investors would be keen to know how robust your product is. While blockchain guards against hacking, it’s a bit different with smart contracts. Hackers can successfully exploit vulnerabilities in smart contracts running on a blockchain.
Plan to have your smart contracts audited. This can pose challenges since it’s hard to find experienced smart contract reviewers. We at DevTeam.Space can help, and you can judge our capabilities by reading “Undertaking a blockchain code audit and its importance”.
The last thing in the world that your ICO needs is to be subject to a cyber-attack. This will almost certainly doom your entire project and send investors running to the hills. In July 2017, an ICO was hacked, resulting in the company losing over $7 million.
If your team does not include a security expert then it is certainly worth the extra money to hire a professional cybersecurity firm. Given the amounts of money involved, not to mention your reputation, these firms are actually a very cost-effective way to ensuring a successful ICO.
A great tip if you do use an outside firm is to include them in your ICO literature to help beef up your credentials. This will also help reinsure investors about your ICO.
Set a realistic value for your token
When it comes to setting the value of your token you should factor in the total number of tokens you plan to issue and the amount you wish to raise. As a general rule, it is better to try to keep the cost of each token lower and instead issue a higher number of total tokens.
Since investors want to earn as much as possible from each token they will be less inclined to buy more expensive tokens.
Alternatively, you can choose to abandon the fixed price model and offer your tokens at either an undetermined price or one that fluctuates depending on how many an investor buys. All of these models have their own pros and cons, so choose carefully.
Kick off your marketing strategy
You should already have a well-defined market strategy developed for getting your ICO out to all the right people. Don‘t forget that your ICO needs to stand out from the huge number of ICO‘s that are launched each week.
You should create a unique and imaginative PR campaign that includes the following:
- An informative and reassuring website
- A great Pitch Deck where your spokesman really nails why investors should buy your tokens
- Support materials like a video that sells your ICO
- Paid adverts and banners that specifically target the sites investors might visit
- Targeted social media campaign
- Article placement on sites such as CoinDesk, NewsBTC, Entrepreneur, and TechCrunch
As with any PR campaign, it is important that you generate the hype before your ICO launch. This strategy needs to be carefully orchestrated so that all parts are executed in the right way and at the right time.
Once again, if your team lacks a professional market strategist who is familiar with ICOs then you should either hire one or engage the services of a professional company.
According to a study done by ICO Holder, “Blockchain Market Forecasted to Reach $28 Billion by 2025″. ICOs will be a big part of this.
The key component to any ICO is investor confidence. Getting your ICO noticed by enough of the right people can be quite a challenge. Without making sure that your ICO addresses each of the points raised in this article in a way that attracts would-be investors your ICO has no chance.
Planning and executing any ICO is a really time-consuming task. However, when done well, the rewards can be immense and ensure that you generate enough funds for your company to undertake whatever project it needs the ICO for.
There is a wealth of literature as well as past examples of successful ICO launches online. Doing your research for each stage of the ICO planning process will help ensure a successful ICO launch. If you at any stage feel that you don‘t have the necessary expertise then you should seek expert help from an outside company.
Frequently Asked Questions
ICO stands for Initial Coin Offering. It is the crypto world’s equivalent to the IPO. Companies can raise money from investors by selling coins or tokens which can be redeemed for FIAT currencies.
Launching an ICO requires a company to create an ICO whitepaper. This paper details the project’s goals and architecture. It also includes expected revenue streams, etc. Once this is complete, the company must try to get as much attention on its ICO as possible in order to maximize the money made.
The company that is responsible for the ICO launch will create clear and precise guidelines regarding how to buy its coins or tokens. In some cases, buyers can buy directly from the company using FIAT currencies, in others they will need to use Bitcoin and other major cryptocurrencies to buy the tokens.