An ICO or Initial Coin Offering is the first major step for many cryptocurrency developers, undertaken to raise some funds in order to develop their own blockchain-based project further. This article will highlight some of the stages involved in carrying out a successful ICO.
First step in an ICO
The first step is a so-called “pre-announcement”, which many developers make online to cryptocurrency communities, forums, web boards, and so on. This involves a brief summary of the project’s goals, which fellow cryptocurrency enthusiasts can comment upon, and which can then be adjusted accordingly. It’s important at this stage to get a sense of whether the cryptocurrency community feels the project fills an important gap, since this is one of the key reasons – aside from and sometimes more important than profit – why people choose to invest in blockchain-based technologies.
Once the idea has been tested and perfected in this way, it is important to gather a team to help launch the ICO – this can include designers and programmers, but also editors, PR-specialists, and ideally people who speak more than one language. It is important at this point to agree about how this team will be compensated for their efforts: will you use your own funds, or can you agree to very little compensation until the stage of the pre-sale or actual ICO, at which point some of the money is used to pay the team?
Next stage in an ICO
The next stage will consist of the actual preparation of the whitepaper, based on an extensive market study and some research into the whitepapers of other, recent ICOs. This should be a lengthy document that goes in proper depth about the project’s goals and aspirations, the experience of the team of developers, the funds required, the deadlines set, the cryptocurrency this project will use or create, and so on. It is a good idea to have this whitepaper checked by experts, since it will be the main document serious investors will base their decisions on. Another important element, which will be put on the website alongside the whitepaper, will be the ICO roadmap, which is a timeline of the projected deadlines for the project.
Launching your ICO website
This will thus also be the point at which the ICO’s website will be launched; usually, a one-page structure with different elements all represented on the homepage is sufficient. One thing to bear in mind here is that the website must be hacking-proof (since it will be used to transact money) and that it must be accessible by many users at once, since hopefully your ICO will be extremely successful. It’s no use running an ICO website if that website will shut down once it gets a lot of traffic. Once the website is online, it is important to spread the news of your upcoming ICO far and wide: this can be done through posts on cryptocurrency forums, but it can also take the form of a subscriber button on the website, through social media channels (blogs, Twitter, Facebook, Reddit, Slack…). It is also interesting to check out some ICO tracker websites and to try and get your project added to them: these trackers evaluate different ICOs and publish the information online, so investors can consult this before choosing to invest.
In terms of the actual ICO, this too can be carried out in multiple stages. Some project owners choose to run a preliminary fundraising effort, called an ICO-presale or a pre-ICO. This is a sale event that takes place before the official ICO, and usually the fundraising targets will be lower – the money raised here can go toward, for example, the salaries of the team of developers, or the costs of setting up a functioning website, of the necessary PR, etc. They are a good way to offset some of the costs involved in organizing the actual ICO, which then follows relatively soon after.
Launching your ICO
On the launch day of the ICO, the most important thing is to have a few software specialists to monitor the systems, since you do not want hackers to get a hold of the funds invested in your ICO. Often, your ICO is the most vulnerable during the first few days. Apart from this, it’s important to keep posting on social media and crypto-related forums to encourage investors to take an interest in your ICO!