Initial Coin Offerings (ICO) are becoming a hugely popular means of raising digital capital to fund the launch and growth of innovative business ideas. However, there are often stumbling blocks and campaigns can fall flat and fail to attract the necessary interest.
Here are five key points to consider when launching an ICO, by Egor Gurjev, CEO at Playkey (In 2018, Playkey successfully completed their ICO campaign, raising $10.5M in the process).
Treat your ICO as you would if you were raising capital via the traditional routes such as private or public funding.
There are certain ICO protocols and minimum standards that need to be adhered to in order to get an ICO away, for example, the publication of a white paper, but these rules aren’t set in stone. The moral of this point is that “if you want to attract investment just as you would normally via a private or public capital raise, then you should treat your ICO as such.” Provide as much information as you possibly can in order to be transparent. It is worth noting that the average ICO white paper runs to about 20 pages, but a prospectus for a stock market investment is in the hundreds.
Clearly identify a problem you are solving
You will attract investors if you can clearly demonstrate that you are solving a problem or improving something that currently exists. There are many examples of people claiming that their solution will transform an industry and ultimately the best solutions and first to market will win the race to success. To make an ICO proposition look attractive to investors you need to show what value you are adding and demonstrate the size of the opportunity.
Demonstrate the value you are presenting and how blockchain is the best solution
It is important to explain clearly how and why a blockchain solution to the problem you are trying to solve or the improvement you are trying to make, is the best option. Usually, it is because someone already has or is in the process of building a large network of participants and in order for everyone to really benefit from that a blockchain solution that introduces tokenisation can hugely improve an existing product or service. You have to answer how will you attract people to the network you are creating and monetise it.
Strong corporate governance and experienced team
Investors always consider the team behind an idea or company. The more experience you can evidence the better. On top of this you should outline a corporate governance structure that is sound and in line with existing structures.
Network and prepare for a hard slog road showing to secure investment
Ensure that you are given as much exposure as possible across all the crypto calendar websites, news websites and other information portals, podcasts and crypto apps. Specialised agencies and advisors are few and far between so it’s important that you choose wisely if you start spending budget on agency support. Meetings, webinars, meet-ups, conferences etc. – it’s a hard slog but to get your name out there you need to be everywhere. Finally, bringing on a well-known investment entity will also determine the success or failure of your ICO, so if you can persuade one of the investment houses in the crypto space to put their weight behind your ICO, you should make a success of it.