With the numerous Initial Coin Offerings (ICOs) that have come into the picture over the past few months, selecting the ones that are more potential is a tough task. To do so and also to run one’s own ICO successfully there are certain guidelines to meet.
It should be analyzed if ICO is the correct path to trade
To be successful in starting an ICO, you need a big business idea. It is required to recognize a case where effective use of the coins can be made which could yield value. Most of the effective ICOs generally include the technology projects linked with cryptocurrencies, which propels the investors intimate with that type of scenario.
The ICOs that put forth a transparent value on the way to adopt their tokens and demonstrate the facets that are an economic enticement with their token-related plan tend to achieve success. This forms the reason as to why the ICO runner needs to answer a few basic queries about his token model. The queries should be as simple and precise as- “what is the token’s role?” and “if it would provide any value to the exchange.”
This thing would impact greatly on the way that your built campaign would qualify and whether it comes under the security laws.
The individuals planning to run an ICO need taking the time and validating their business model. They need to highlight the value in integrating blockchain in their solution. They even require getting to light as to how their ecosystem would work.
The ICO startup founders need to build their prototype before the launch
The ICO should be launched after designing a functioning prototype. This is a deciding facet for several investors. Out in the market, there are a whole lot of ideas, but the consumers focus on investing in the tangible things. A functioning prototype provides a lead to begin the entire process over the several other projects. A prototype may even act as a “deal breaker.”
An efficient community team should be built for regular coverage
A huge proportion of the individuals who have begun planning for ICOs since the year 2017 are amateur speculators who want to quickly get rich by imitating the gains that the investors have obtained. This implies that they might not have gone through your whitepaper and they may not show up interest in the things you are trying to get. They perhaps may not even completely understand the things you are trying to carry out. Nevertheless, they are frantic by the assurance of simple money and are scared to miss out the opportunity to be a participant of your ICO. The consequence is the formation of many queries regarding your whole project thereby rigorously straining the individuals in your group who have the responsibility of community management. If you are fortunate enough doing projects such as Electroneum, which has more than 40,000 users as well, a single person would not be able to manage the numerous messages that you would be getting each hour. If you require catering an entire lot of these individuals, a community group/team needs to be set up, which could 24*7 cover all the communication channels efficiently.
The ICO startup founders need setting up a legitimate entity
It is to be noted that any and every company mandatorily needs setting up a legitimate entity and declaring a jurisdiction. Making a selection of a token amiable jurisdiction could prove to be an ideal scenario. You need to be sure of talking to a lawyer on the same matter.
Also Read: Five Companies Who Are Mulling An ICO
The ICO startup founders need to know and stick to the local protocols
They need to possess an in-depth knowledge of the regulations and protocols for the ICOs in their regions. They need to make sure that their project adheres to it. If you are not able to formulate your ICO because of legal restriction in a particular region, then you should switch to some other locality. Some of the ICOs have shifted their operations to much more crypto-amiable nations (for example, a few Chinese firms have switched to Hong Kong or Singapore). Smart investors would never wish to put their hard earned money into the things, which may not legally be conscious.
They require sharing a roadmap and their white paper
Two documents, which are the roadmap and white paper, are very important.
The job of the white paper is clearly defining the technical and the background aspect of the offer that you have put forth, the problem that you focus on solving, and the reason to why the people would select your given solution.
It is necessary for the purchasers to know the token’s features and characteristics that they are purchasing, the standing risks, and the advantage of your network or platform.
The roadmap must have enlisted realistic and transparent targets involving the estimation of price and time for every development step.
You require creating excitement, interest, a feel of urgency in taking up your solutions and explaining the value of the development of the project transparently.
The ICO developers require getting legitimate counsel and setting up an appropriate KYC process
You need to make sure about the budgeting for the legal counsel and get your “Know Your Customer” process correctly done. The space of cryptocurrency is facing continuous flux, and fresh protocols could appear almost at any time. No one wishes getting trapped halfway through their crowdsale due to the reason that they economized on the lawyer fees. You need to discover and know the things that are needed for the things which you plan, and if at all required you need approaching the experienced organizations. Doing everything by following the guidelines would prove to be worth it in the long run.
The ICO startups and developers need defining their “terms and conditions.”
Clearly defining the risks, the warranties, the uses, the liabilities and the other legal problems is the core asset due to the reason that it depicts the legitimate conversations in between the ICO developers and the common people. You got to make sure of adopting an approach of similar consistency and cautiousness throughout your communication. Now the common rule is reinforcing the confidence of your participants by gathering all the contributions in a “multi-signature escrow wallet,” and describing a process to return the funds in the situation of failure.
Now, to raise funds through an ICO is a facet of the general blockchain ecosystem and fresh ICOs are introduced each day. Just posing to be an ICO entrepreneur holding a white paper of 5-page would not get you easy money rather may put you into some risky scenarios. Regulations would hike, and until that doesn’t stop innovation, it is compulsory to safeguard the investors.