Don’t let the numbers fool you: planning a successful ICO is no easy feat. While there has been a flurry of ICO activity over the past year, the fact remains that the vast majority of token sales don’t reach their cap, and more than 50 percent barely get over their minimum threshold.
Even so, many companies are jumping on the ICO bandwagon, hoping to become the next big thing. While it is certainly possible to have a successful ICO, as these examples prove, it often takes more than chance or luck to make a big splash.
Much like with anything else, a successful ICO requires a significant amount of thought and planning. With that in mind, here are a few tips to consider for planning a successful ICO:
- Develop clearly defined and realistic goals.
Sure this sounds obvious, but it’s often an overlooked step by people rushing to launch their ICO. Nothing is more frustrating to investors than a person or team of people who haven’t taken the time to outline the goals and purpose of their project.
For this reason, it is imperative to create a white paper that clearly outlines both the technical and nontechnical aspects of the product, the problems it will solve and how it’s going to solve them. In other words, why is your product valuable?
Similarly, it is also important to develop a roadmap that provides a timeline for each stage of the campaign, from product launch and budgeting to seed roads and security audits.
It’s also important to develop a structure that ensures best practices and compliance with token standards if you want to be taken seriously by investors, which brings us to tip number two.
- Define Terms for Investors
Since you’re ultimately looking for an investment, defining the terms for investors is another crucial component in planning your ICO. The three most common ‘rules’ to follow include:
- Discounts: Investors who decide to contribute at the initial onset should be given a discount or some other financial benefit
- Escrow wallet: This is a multi-signature digital wallet that displays the names of all key holders announced to the public. Some of the key holders include complete outsiders who are uninvolved in your project, which serves as an additional guarantee.
- Fund return: Should your ICO fail, you’ll need to have a process in place for returning funds to your campaign contributors
- Be Cognizant of Regulations
While there was some uncertainty in the past about whether ICOs were beholden to SEC securities regulations, the SEC has made it clear that ICOs will be met with greater regulatory oversight in the near future. On February 6, 2018, during a senate hearing, SEC chairman Jay Clayton warned, “A note for professionals in these markets: those that engage in semantic gymnastics or elaborate structuring exercises in an effort to avoid having a coin be a security are squarely within the crosshairs of our enforcement division.”
In other words, ICO entrepreneurs are required to take the appropriate steps and measures to ensure compliance with the federal securities laws, so be sure to stay informed on the latest regulatory developments.
- Develop a Proof of Concept
Perhaps most importantly, being able to present a working product that has been tried and tested is ideal for having a successful ICO. It will not only garner the attention of more serious investors, but also prove the credibility and worth of your project. Think about it this way: would you rather hear about an idea or be able to see and experience its value firsthand?
Keep in mind that these are just a few suggestions based on the success of past ICOs. The bottom line is that launching a successful ICO – just like launching a successful business – requires a significant amount of thought, effort and planning. But if you use the tips above as a starting point, you’ll at least be on the right path.
If you’re thinking about launching an ICO or are currently in the planning process, TTG can help put you on the road to success. Contact us today for a free consultation.