Expert Tips for a Successful ICO

And while many startups think that theirs will be a thrilling story of record-breaking success, the numbers are telling a different story.

While the ICOs have brought about incredible successes like that of Tezos that raised $232 million in less than a month, the truth is that there are many startups going the ICO way but not managing to raise the envisioned amounts of funds. On the other side of the coin, the coin market is ripe, and there are many who want to invest, but are afraid of unsuccessful ICOs.

Evidently there is a problem. For instance, from experts’ analysis at ICOService.com and Roadshow.io, there are majorly two problems:

1. Poor quality ICOs. Poor quality ICOs not only reduces the chances of ICO success (it reduces their amount of token sales and dampens their chances of raising their much needed funds from the market), but also increases the distrust of token holders. There is need for high quality preparations for every ICO that will guarantee a healthy functioning of their ICO ecosystem as well as potential for future growth.

Startups need help in preparing their marketing, PR, investor introduction, blockchain conferences, video, and token economics so that investors perceive a lesser risk with investing in such a startup, such startups will close their targets successfully.

2. Low liquidity rates. Liquidity problem comes in once the startups list their tokens on token exchanges. If an ICO startup/company fails to be top one, has a weak business model, and a weak team, their chances of realizing their token value increase/growth once they are listed on token exchange diminishes. This then raises the problems of token liquidity.

So what can we learn from Tezos who made $232 million dollars in a record one month? Here are expert tips to get you started for your ICO and ensure your success as well as your growth.

Integrate your ICO digital token into your business model

So does your project provide any real solution to real-world problems? This is one of the surest ways to determine whether your ICO will take off and remain sustainable. When all the hype about fundraising is settled down, demand based on solutions will hold your project up for the longer duration of time in the market. Here are a few more questions to help you be more particular:

• Is your business idea disruptive, does it have the potential to fundamentally alter an already existing blockchain-based business model,
• Does the idea have the potential for scalability? A great example is the value of Ethers which is significantly secured by the fact that they run decentralized applications (Dapps) on the Network. But if the only value for your coin is to be bought or sold on the exchange, then your value will soon crash soon after the close of the ICO. When the speculative pressure is over, your coin needs to have a similar level of intrinsic demand to prevent it from becoming a gimmick.

The ICO Company and team

The most valuable asset for any project is the ‘human capital’. This is no different for ICOs. The human capital defines how they move token on the market and grow its value. The most important aspect of the ICO team is their credibility and trustworthiness. It is important that details about every member of your team are available and verifiable by potential investors. Team members who have a track record of quality performance in other similar ICOs raise confidence levels among potential investors in your project.

Our experts recommend that you find professionals in ICO and crypto-currencies who command respect (according to their profile to be in your team). Have the list of all major team members along with their faces, and social media profiles available for review. ICONOMI, for instance, had team members who were credited for creating Cashila that was in operation since 2014. They helped raise $10 million. Not all projects may have the big names in the industry but they should be relevant and credible. It is important to avoid any major team shifts during the ICO, before or even immediately after the ICO. This will cause a drop in investor confidence in your ICO.

Set and communicate clear goals to your audience

Goals that are not realistic and clear project the image of a team which doesn’t have an idea of what they want, or worse still, they are a scam. Have a white paper outlining the problems the project intends to solve, how you intend to solve the problems and the technical details of the product. Then include a road map that shows targets aligned to timelines and which team member is responsible for those activities.

Token Economics

Not all ICO companies/startups understand its importance. But this is a very important task. Token economics usually include how the token is used in what transactions, what smart contracts are used, how the demand for token is created, how the token deficit appears and why the token will start growing in price eventually and will be in demand in the market. The bottom line of token economics is that it doesn’t matter significantly how much is raised, what matters the most is how much the project earns for investors.

Product and prototype

Having an MVP would even be better. Having a prototype, a product or an MVP shows that the project is open-source and committed to scrutiny of their code by the developer community. If the codes are sound, then investor confidence goes up and more investments are done. Consider Bancor which raised $150 million and Civic which sought $33 million. Bancor’s undoing was that they did not have a prototype. Bancor captured all the network value and raised the amount in 3 hours. But since they didn’t have the product nor the prototoype, there was nothing for speculators to trade with during the period the tokens were listed on the exchange. Immediately the value of Bancor plummeted and fell below the ICO price. Civic on other hand did not take long before they had a 800% return for their investors.

1. Consider special tools like Waves to enhance your ICO campaign
2. Ensure good timing and good communication
3. Protect investor interests by providing premiums for early investors, consider an escrow wallet for all contributions, and have an outlined process for refund of funds in case of failure

With technical, institutional and customary barriers to fundraising crumbling ever faster, one consequence is that alternative forms of investment are emerging. But just as the Internet itself simultaneously gave us greater access to the sum of human knowledge, we may have a similar impact when it comes to financial innovations driven by the blockchain technology. You can learn from other’s experience and deliver incredible success on your next ICO together with ensuring sustainable growth, demand and returns. The starting point is here, start with the above and build your empire.