Launching an ICO - The Ultimate Checklist
In order to help founders pave their way from an idea to actual funding, we have listed what will be required. However, this doesn’t mean that ALL of the steps are necessary in order for you to have a successful ICO, but the more you do, the better.
- Concept of idea/project: Like any traditional startup, everything starts with an idea to solve a problem.
- Assembling the core team: The founder/s assembles the core team members that will drive the project forward.
- Product planning: With a team of diverse skilled members important decisions such as the technology to be used, the product functionality, the token/ICO characteristics, etc. are decided.
- Getting advisors: Fulfilling the shortcomings of your team with experienced individuals that can provide advice, mentorship, and connections.
- Product/Community marketing: Start building an engaged community and introducing the project to space. Create a communication plan to introduce the product and the vision for the project.
- Developing a whitepaper: Authoring a whitepaper to introduce the problem, the solution, the product and its technology, the token and the ICO, team, business, etc.
- Releasing a roadmap: Present a feasible plan of action with commitments for development and milestones to keep the team accountable to the community and supporters.
- Seeking legal council: Define jurisdiction and get legal council to operate under the corresponding legislation including corporate structure, taxes, securities, AML and KYC laws, etc.
- Token sale marketing: Announce and develop a communication strategy to inform people about the token sale, the specifics of the token, its distribution, sale terms, etc.
- Releasing code and audits: Share your smart contracts code for revision and ideally have a specific auditing service do a revision.
- Token Sale (optional pre-sale): Run the actual crowdsale or a pre-sale (public or private) to collect some “seed” money for development.
- Proceeds conversion: Teams liquidate some of the received money to secure cash and pay to build out the team, technology, and business.
- Releasing prototype: The sooner a prototype is presented the better. If it is before the ICO even better.
- Transparency reports and post-sale: After an ICO is completed the real work and responsibility to your community begins. Being transparent, showing progress, and keeping constant updates is essential.
As mentioned before, you don’t need to cover all of the steps, however, there are crucial fundamentals your project will need to have no matter what.
The first thing that the investors will probably check is who is your team and their credentials. Your team is what represents you the most, and the more trustworthy your team is, so will your project be.
Anything that your expert team lacks, should be compensated with your advisory team. Since it is hard to find experienced blockchain developers, advisors are a must. Your advisors should be chosen based on the value they can bring to your project.
Whitepaper (Position and yellow paper)
Since the two of the most successful blockchains, Bitcoin and Ethereum, both had a very detailed whitepaper, this became a guarantee of your projects credibility in the crypto world. Whitepaper should contain detailed information that would be of interest to the investors. Any serious investor begins their investigation right here, with the white paper. So it is crucial to have one that answers the most questions.
Position paper: some projects release one before the technical whitepaper. It is a clear 2– 3-page argument supported by your technology proposal that helps get community feedback to develop the technical whitepaper later on.
Yellow paper: The more sophisticated crypto/blockchain companies will offer a Yellow paper or a second “technical” white paper. This one presents in scientific detail the technology and the innovations that they have created, or propose to create.
The brand strategy
An assertive brand strategy will build your trust and reputation in the crypto space. It goes beyond your marketing strategy. This issue should be one of your priorities in your ICO strategy.
Code and/or prototype
You may be great at communicating your ideas, but can you execute them? Having a code repository, or better yet, an actual prototype can mean all the difference in the world for your project.
A roadmap is a tool that can verify whether you accepted the money from an investor. It holds you accountable for it. What it also does is show all the different versions of the product releases, and if you decide to present the plan for the following months or years (which is advised), it shows all the turning points of your project.
Token sale terms
Buyers will always be interested in knowing the terms of your token sales. How much of it will be distributed, how much will be kept, the duration of the sale, etc…
12 Reasons to launch your ICO with the ICODashboard platform
Check out the 12 reasons to launch your ICO with the ICODashboard platform.
Launching an ICO - List of Key Documents
Whitepapers are necessary for launching products and business in order to present the valuable impact that they make and elaborate on problems and issues that they solve. For cryptocurrency industry, it’s no different. Satoshi Nakamoto was the pioneer of blockchain – a name behind the Bitcoin – and its Bitcoin whitepaper has become like a business proposal of sorts. Individual and institutional investor alike, expect to see the whitepaper prior to establishing business collaborations, as it defines the purpose of what, why and how is being developed.
Even though necessary, whitepapers are not the only documentation that an investor wants to see when considering an ICO. Experienced investors will want to dig deeper and gain a better understanding of the blockchain offered and not make decisions on the first appearances. If we do consider whitepapers as the business proposals, then a bit more cautious approach wouldn’t do any harm.
The best way to handle investors curiosity and guide them in making their decision is by providing more relevant documentation that they’d want to see. furthermore, it should present additional information in a simple and transparent way. For all these reasons, certain documentation has become customary when presenting an ICO to investors.
The essential document for a blockchain technology business usually is broken into three important segments:
- Detailing about the token
- Describing the business model
- Presenting the team members and advisors
A valuable addition to this document would be to provide professional translations in one or more languages.
One-pager: a short summary of your ICO startup
As the name suggests, one-pagers are one page long documents that give a most important information about a project in a nutshell. Their role is to provide easy to grasp information about the project without the need for a detailed analysis of the white paper. Similarly to the whitepaper, it touches on the same points, but the approach is different and briefer.
- How token economy affects supply & demand
- A business model that increases demand
- Presenting the team members and advisors
A crossing point between a brief one-pager and comprehensive whitepaper is a business presentation. This document is meant to appeal to investors and final token holders and inform them of the project’s goals and how the token relates to it. It represents the main idea of the whole project and should be done appropriately.
The key element of blockchain’s online presentation is called the landing page. A landing page is a part of a parenting website, and its enormous importance lies in the ability to attract new users and new investors. The landing page should be appealing, informative, and user-friendly, and transparently offering insight into the more relevant documentation.
Startups need to manifest their compliance with laws and regulations publicly. The best way to do saw is to establish the project’s legal team that would review the token’s structures.
It’s also important to consider where is the issuer of the token registered because this implies under which jurisdiction the project will operate under. Nick Evdokimov, a blockchain investment expert has recommended using the information about issuer registry to ensure that the project is operated under regulations and is not fraudulent.
This is usually the most common and the most widely spread material of any startup. It reflects on how good is the project’s marketing strategy. The good promotional material often contains links to many different resources and channels that further drive the user engagement.
- Positive predictive feedback
- Official business social media accounts
Another key point to not miss on is paying close attention to the fund arrangements of the blockchain startup. These funds could be used to buy tokens in bulk and then help the startup sell them and increase their user base.
Finally, there is the technical side f the whole project that is properly presented in a technical documentation. This type of the documentation requires thorough analyzing by experts in order to make sure that the technical side of a project will run smoothly. Sometimes, technical documentation is referred to as “yellow paper” and is published oh GitHub as the code for the startup’s smart contract.
Top 10 Tips for Launching an ICO or Token Sale
Essentials to launching a successful ICO
The world of blockchain brings a lot of automatization and inclusiveness of investors in finance. For an up-and-coming start-up, there are a lot of challenges. Certain companies are there to help in this case, they offer services such as proper back-end infrastructure that supports the crypto-based project development, roadmap and white paper for the implementation of the crypto-based project, conforming to regulations to ensure there are no security violations, managing and maintaining the Escrow Account, marketing, and Public Relations. But what are the fundaments for creating a successful ICO?
Create a precise ICO launch design
Creating a precise ICO design provides a clear explanation as to how the crypto works, the manner in which the funds will be used, governance and compliance approach that will be used and how the investors will receive their profits.
Provide a useful white paper
A white paper is essential when it comes to providing a roadmap for the execution of the project. It also contains details on business and regulations and explains how all the technology that will be used in the project works. But most importantly, it must provide all the required data about the project, your team members, and everything else that the investors may be interested in, in order for them to make a decision in your favor.
Obey the security laws
One of the most demanding aspects of ICO is the AML/KYC laws. Because if you are issuing tokens for terror funding or any other illegal activity, you will, of course, be committing a crime. So it goes without saying: make sure that all of your activities are legal.
The team that will be behind your projects is the difference between a good project and a great one. If you hire expert personnel, you are one step closer to reaching your goal.
Make sure your ICO is secure
Where there is digital money involved, there are hackers which are attracted to it like sharks are to blood. So providing optimum security for your ICO is imperative. This will also be of great importance when it comes to attracting investors as well, not just protecting your ICO. If investors know that your ICO is secure and well guarded, they will be more likely to invest in your project.
Use the right technology
Decide which platform will be the best home for your tokens. Ethereum or Waves is a good place to start. Or, you can even create your own blockchain, if you wish to have technology like no other.
Decide on the projected value of the token
The investors are likely to check whether the tokens they are about to secure can vouch on returning their investment. Make sure that the projected value of the token is the one investors are looking for.
Make sure your website communicates the sum and substance
The ICO website should contain everything the ICO investors may want to know. Make sure that your website communicates the basis of your project and that it can provide all the answers to investor’s questions.
Build an active community on social networks
One of the crucial elements to having a successful project is building an active community on channels such as Twitter, Instagram, Facebook, etc… The reason for this is to support the story for the shareholder and push the traffic to the ICO site.
Is your Product right for an ICO or Cryptocurrency?
Everything you need for a successful ICO
For startups founders looking to develop a new project, these numbers are enticing. But not all projects or companies are suitable for ICOs. Determining whether your project is the right fit for an ICO will save a lot of stress in the long run.
Do you need blockchain technology?
The first thing you need to determine is whether blockchain technology will be useful to your project. Once you’ve established that this is the way to go, you will need as many contributors as you can get.
Do you have enough cash flow?
Launching a successful ICO by yourself is pretty hard, so you will need to employ a team that will be able to assist you. Your team should include blockchain developers, marketing specialists, graphic designers, web developers, legal advisors, translators, and others. Like mentioned earlier, you will need as many contributors as you can get, and having an experienced team behind your project will attract serious contributors.
Have you sought legal advice?
As is the case with almost every business, you should seek out legal advice prior to promoting your ICO. Legal advice might be very helpful when it comes to determining the nature of your token.
Are you able to create a sensible token?
Contributors will be interested in all the details about your token, in which jurisdiction it was generated, how it can be used and whether or not it is classified as a security. This is all important in determining the nature of your token and enforcing regulations accordingly.
Are you ready to market yourself?
The art of ’’selling yourself’’ is very important in this game. This means that almost everything lies in the hands of marketing and PR. This is because, a lot of ICOs are being launched monthly, and you need to stand out in order for you to have a successful ICO. This is what you will need:
- A professional website
- A whitepaper outlining the technical aspects of your project
- A robust Telegram community
- In-person and online events
- Public relations (press releases and media pitches)
- YouTube reviews of early-stage prototypes
- ICO listings
- Managed social media accounts
- Customer support
- Are you prepared for public scrutiny?
4 components each ICO’s project should contain:
- Innovation Value / Imitation
- Improvement / Replacement Potential
- Feasible / Implementable
- A timeframe for Product Creation
Looking at the ICO’s product, we consider issues like:
- Is the product innovative? And to what extent is it innovative?
- Is the product an imitation? And to what extent it is imitating another product?
- What differentiates the product from other similar products?
The “Innovation Value” can be a strong factor to position the ICO’s product, when launched, to a specific market segment and drive its worth and value.
2. Improvement / Replacement Potential
By Improvement / Replacement Potential, we mean that besides being innovative, it should be a sort of an upgrade to existing products or a replacement for a worthless one.
3. Feasible / Implementable
Besides being innovative and improbable, the product should be feasible and implementable. This means that it is possible to launch that project. In addition to this, in the analysis, whether the product is implementable, you should check if the prototype or a beta version of the product exists. This ensures that the developments are ongoing and that the creation of the projects after an ICO is higher.
4. The timeframe for Product Creation
An important aspect when it comes to launching the project is timing. For an example, there are certain technologies that work the best at this moment or a year from now, and if you launch your project in these two instances, it is most likely going to succeed. However, this may not be the case in 3 or 6 years, since that technology will be obsolete and your project will most likely struggle.
The risks and rewards of an ICO
There are a lot of benefits while using the blockchain technology, however, there are quite a few risks involved. Not all ICOs succeed, and even if they do, not all startups are ready to support increased inquiries from potential contributors. Consider all these factors before planning your ICO.
5 Things you need to have in place before launching your ICO
What Should You Prepare Before Your ICO Launch?
A lot of entrepreneurs are having problems having successful projects because the early stages of launching your ICO are extremely challenging. Pre-planning is the most important aspect of your business. So, here are the key elements to your pre-plan:
Have you ever heard of ‘’The team is only as strong as its weakest link?’’ This is what you should base your search on for an expert personnel, as they will make or break your success.
Legal and Financial
Since ICO regulations differ from country to country, there are no set rules or laws. However, something like funding terrorists or money laundering is illegal everywhere, and it goes without saying that you shouldn’t be a part of any illegal activity. And as for your financials, your business model should clearly state the percentage you’d be giving your team, investors and partners, the minimum and maximum presale caps, whether you’d be offering early-bird discounts to investors, the duration of the presale, what happens if the ICO target isn’t reached and terms for investors.
A whitepaper is basically your business card. It represents you and your intentions, and it’s impossible to have a successful project with an unsuccessful white paper. Your white paper should contain all the information investors may want to know, like your need for use of tokens, the problem you aim to solve, growth projections and all the information on your team, etc…
You should begin your creating your marketing campaign at least three months before your ICO launch. The most important thing is to find your target audience and to construct your messages according to them. Your communication strategy should be repeated, but not in the sense of you bombarding your audience, as this may create a counter effect.
Hackers oppose a huge problem, as they are attracted to ICOs, for all the reasons one might presume. You should ensure that your ICO is secure, as this will not only prevent theft, it will bring more investors your way, since your project is secured, and therefore trustworthy.
Why most ICOs Fail
Failure Of ICOs: Why Does It Happen?
So, how does an ICO work?
Tokens are native currencies that are being used in an environment, and the transaction is rather simple. If anyone wishes to purchase the token, all they have to do is send a certain amount of ether to the crowd-sale address. Once the contract accepts the transaction, once it is done, they receive the number of tokens they purchased.
It all seems so simple. So, what is the story behind ICO failure? The reasons as to why the ICOs fail is because the entrepreneurs overlook the three pillars that make an ICO:
The biggest issue with the cryptoeconomis id that the people usually focus on the ’’cryptography’’ part rather than the ’’economic’’. And what this does is create an economically unstable token. In order for a token to be successful in the long run, there must be enough demand for it. However, there are permanently inflationary tokens out there, which means that their demand must always out space their inflation for them to be valuable in the long run.
However, the problem with ICOs, but also its big advantage, is that anyone can come and raise money for their concept. Doesn’t seem too bad, right? Well, think of it this way, there are a lot of entrepreneurs wanting to make easy money, yet they don’t think it through. They don’t know the first thing about blockchain, and so their project fails. As a matter of fact, the statistics for ICO failure is somewhere between 90-95%.
Their end goal became: “Build a flashy enough whitepaper to get good money in ICOs”. Because of this speculation and very little due diligence, the “Greater Fool Theory” came into play.
What is the Greater Fool Theory?
The Greater Fool Theory is an economic theory that says that the price of the product increases, not because of its value, but rather than the irrational beliefs attached to it. The best example of The Greater Fool theory? Art.
So how does it apply to the ICOs? Let’s say you have a lot of apps coming up and currencies which aren’t bringing any novelty to the crypto world. But because of the hype that surrounded them, and a lot of inexperienced investors out there, their value increases, thus creating a token inflation.
A utility is a complete satisfaction that one receives because of the use of the goods or services. A lot of tokens don’t maximize their token utility, in fact, most of them don’t.
The most important question you must ask yourself, as an ICO developer, is: If you take away your token does your business fall apart? If you replied ’’no’’, then you don’t need a token. There are only a few instances where you should tokenize, and a lot of people just do so, so they can buy more Bitcoin and Ethereum… This is not something you should do.
Once there is a token involved, you should understand its primary role and maximize its utility. The token has a lot of purposes, and it is exactly the spice that your business needs if you know how to exploit your tokens to the max.
As William Mougayar points out in his Medium article, there are three tenets to token utility and they are:
You should ask yourself these questions if you intend to fully utilize your token:
- Does my project really need a token?
- Am I fully exploiting the token and getting as much token utility as possible.
- Is my token useful only for initial liquidation purposes?
- Is there any value in holding my token long term?
- Is my token ticking off as many roles as possible?
During and after your ICO, you should know that the hackers will be watching you. Now, I know this may sound a little scary, but it is true. And unless you haven’t put that much effort into security, they will be the first ones to know. Chain analysis says:
“More than 30,000 people have fallen prey to ethereum-related cybercrime, losing an average of $7,500 each, with ICOs amassing about $1.6 billion in proceeds in 2017.”
The crimes that happen largely fall into three categories:
- Faulty code.
- Phishing Schemes.
- Mismanagement of keys.
If you are a developer, then there are 3 questions that you need to ask yourself:
- Where are you storing your private keys?
- How are you protecting your wallets?
- How are you protecting your customer’s tokens on your ecosystem?
- Who are you sharing your multi-sig wallet keys with?
As a developer, you will have many fears and uncertainties as to whether your investors will simply run away with your money. One of the best ways to be certain that this is not the case is by using a multi-signature wallet.
What is a multi-signature wallet and how does it work?
The simplest way in which you will understand how a multi-sig wallet works are by looking at it as a safe which needs multiple keys to operate. The multi-sig has two sole purposes:
- To create more security for your wallet and save yourself from human error.
- To create a more democratic wallet which can be used by one or more people.
So, how does multi-signature wallet save you from human error? Regardless of all this, the multi-sig wallet is hackable. The wallet is only as secure as the code that makes it.
With an ever-rising popularity of ICOs, everyone thinks they are the next best thing that will hit the crypto-world. They are not. And unless you cannot answer these three questions, please don’t start your own ICO:
- Why are you doing your ICO?
- Is your token something that will bring genuine value?
- Are you sure you are not doing this just to make a quick buck?
And even if you do know how to answer these three questions, don’t forget, the math is still against you, with the 90-95% of failure. What will get you in that 10-5% of success in your research, your planning and trust? Create something that will contribute to the crypto-world, not just exploit it, and probably that vision will get you in that 10-5%.
Pros and Cons of Launching an ICO
For Cryptocurrency 2017 was a special year for quick adoption ICO like a way to move up our capital.
We already wrote about how much 2018 and future will be flourishing for blockchain technology and that every day more and more companies getting in the ICO world of innovations.
Then, how much is an ICO good to upgrade the success of your business?
How that works whit an ICO?
We already explained in our articles that blockchain helps us to raise our capital. Through the ICO we make new unique cryptocurrency tokens and after that, we are selling to stockholders, shoppers and other interested people.
The legal character of ICOs has two different options, the first one is that tokens are for papers of worth and second are more like support for subscription/pre-sale of merchandise.
What is utility from an ICO?
There are so many ways to collect money in today`s market. But the most important key is how much time that “way” will spend and how much that will cost us. To start IPO it is expensive, takes a lot of time and it`s complex. The reason is that all these provisions for IPOs are protected to a large degree, and all these legal fees depend from country to country.
There are two ways to grow up-market through ICOs:
The first one is, by issuing papers of worth, and that`s under strict protection. Companies sell their IPO over financial mediator.
ICOs give us a promising solution and connect us with already existing companies and small shoppers because this market before ICOs was badly used, ICOs, definitely, can help for better capacity to increase access.
The second way, ICOs are international, investors across all world traded on the same market, and we are not limited anymore. Do we need a bigger benefit…
There are two main challenges, ICO dares to do more than just marketing and capital raising.
The most often question about what we need to take care is about regulation. If ICO has potential many governments can cognize that potential for good business, and help them on market, as well, the government is careful with risky investors, they have an advisory team who take care who is good who is not.
Modus for tokenization
Some of the projects are just with good advertising but they don`t have blockchain technology on their maximum, on another side some of them offer good technology but they do offer a good model of tokenization, which encourage investors on ICO market.
Deploying a tokenization model can be complicated from few reasons: – maximum of values from investor or shoppers;
– benefits the technological potential of the blockchain and cryptocurrency tokens;
– In accordance with the regulatory obligation
Making a balance between all these models we provide business success in ICO market.