Quite a lot of the ICOs proved to be successful in 2017 but some of them missed their goal for different reasons. While some were maybe too ambitious, others lacked a good marketing campaign, or the team and product were not convincing. Early movers in the ICO space got lucky in the recent years, raising millions of funds in a matter of minutes or days, but with rising competition, this won’t necessarily be the case for all ICO’s to come.
Let people know and your skills and trust them
Many of these early ICO’s were conducted by deep stack blockchain developers that were part of the core crypto community, with high reputation and track record. The ICOs that sold out quick and fast did not come out of thin air. Early token investors – who by the way were also part of the core crypto community – knew these developers well, and trusted them, as their respective product idea had been discussed and peer reviewed for many months over Reddit, Twitter, Slack, Bitcoin Talk, various crypto podcasts, etc.
White papers are the business plans which teams use try to raise the funds. The whitepaper should be appealing to investors with no technical knowledge and developers alike.
It needs to include:
- Credible technical roadmap.
- Plausible business roadmap.
- Clear tokendistribution model.
You can take your effort one step further and release a technical paper like the Ethereum’s Yellow paper or Zcash’s technical whitepaper which gives a further insight into the technical implementation.
You will be more credible if you already have a product prototype.
Investors are sensitive regarding token distribution and token pricing. You will need to be clear on how much of the funds (percentage) your team gets and how much will be dedicated to investors. Make sure you have the right monetary policy. If you are setting a high inflation rate, you might lose potential investors. Most of the dApps have no inflation because all the coins are pre-mined or spawned by the team.
Having a diverse team is a key aspect. Don’t focus on business people only. If you want investors to take you seriously, make sure you have good developers on board. Also, choose your advisors wisely. Make sure that they all agree being part of your team.
Regulators all over the world are starting to look into ICOs, and regulate the scene. There are many unresolved questions regarding the role of a token (is it a security of not?), what taxes apply, what liability laws apply, etc. Because of regulatory uncertainties, many startups in the past have setup a foundation in blockchain-friendly countries such as Zug, Switzerland or Delaware, US.
Furthermore you need to understand whether your product you are building is in a highly regulated market – like making, energy, healthcare, etc – , and if yes, how will those regulatory laws affect your product/token.
You can have the best product, but if people don’t know anything about it, there won’t be a buzz and no one will invest. So social media is a no-brainer. You will need to be constantly active. The only tricky thing is which channel you chose as your main channel. You will need to be constantly active, generate discussions around topics of interest, and share mentions you might get from industry experts or respected media channels.
Website Security & Stability
While the ICO is running, make sure you have a good hosting provider and simple website. If there is a big interest in your project, you will need to stay online at any time. If you are managing your community on Slack, please disable all chat communication while the ICO is running. There have been many successful scam attempts by people who trick the users into sending money to the wrong address. Create how-to guides on how to participate in the ICO. List the recommended wallets on your website. Shoot explanatory videos about how to send funds to the ICO and how to secure the tokens.
ICO: Adress Scamming
While the ICO is running there will be many scam attempts. This is where Slack shows its weakness and could fail you in terms of moderation because you cannot disable private messages there. People are slowly moving to alternatives such as Discord or RocketChat. Keep an eye on your webpage. There have been succesfull attempts where people have managed to change the official address on the website whithout anyone noticing and investors lost their funds. See the CoinDash token sale.
Consider locking the tokens for a few months. This way you will scare pump and dump traders who invest in ICOs solely for one purpose: dumping all tokens on the market for a quick profit. Talk with exchanges regarding the token listing. They are overwhelmed with requests thus an early action is required. After the token starts trading, you want it to have high trading volumes which won’t happen if you are listed only on one small exchange. Consider diversifying your funds. Don’t keep all your eggs in one basket.