A lot of business is leveraging on the advent of the Cryptocurrency industry to raise funds for their business via ICO (Initial Coin Offering). The following tips to be discussed in this article are very important for entrepreneurs to keep in mind while launching an ICO.
It is essential to know what exactly ICOs are; it is a crowdfunding campaign which people invest in the form of cryptocurrencies.
The process entrepreneurs go through to raise funds for a new business is very tasking and tedious. These have contributed to a famous phrase “Die a startup or get acquired later by Microsoft, Facebook or Apple.” Startups raise funds via three major methods – debt-based funding, equity-based funding, and crowdfunding; the latter is what ICO is majorly about.
The Cryptocurrency industry at present is not a rosy one. Cryptocurrency influencers like MacAfee have predicted a rosy day in the industry, especially for those that can HODL.
Based on the increase in the acceptance of the Cryptocurrency market, the following tips to be discussed below will serve as a blueprint for startups that may be seeing ICO as a potential source of raising funds.
A solid whitepaper
A whitepaper serves as a guide to the vision, mission, and purpose of the startup, a solid plan must be put in place to write a distinct whitepaper that is well detailed, this is what tells potential investors what the ICO is all about, it must also include the teams that are behind the startups.
Safety and security
One major thing that has discouraged a lot of people from ICO is the issue of security and trust. The startup must ensure that the public has confidence in how the issued token will be protected from hackers, spammers, and phishers.
The safest method for developing smart contracts and carrying out transactions is Blockchain; a lot of security breaches has been reported in time past. Nobody wants to invest in a venture, and here that their investment has gone, that is one of the importance of putting an excellent whitepaper in place.
“Integrity is everything,” and that of the people behind the ICO must not be in doubt. A substantial measure should be in place in other to ensure that the security of all the social media platform of the ICO is secured, to prevent phishers from scamming prospective investors.
Building and managing the community
One of the significant things to look out for when starting any venture is to ensure one must plan to the end. Launching an ICO is just the start of a journey, building and managing the community is the end goal. A well-defined management team is what makes the ICO build trust and respect. All loopholes that can make the public to lose trust in the ICO should be blocked.
The type of token to be issued
The token that is issued during an ICO is divided into three basic categories; we have the security token, the utility token, and the payment token. The company must clearly state the token to be used.