#5 Things You Should Know About Conducting ICO
ICO listing websites are a very popular means to promote your ICO and get your name out in the broader community
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It was when I was working on RentalCoins, that I understood the fundamental difference between an Initial Coin Offering and a fundraising exercise. The common misconception doing rounds these days is that Initial Coin Offerings are an alternative to raising money from Venture Capital firms. Conventionally startups raise money by dissolving equity; allowing investors to buy a stake in their business.
An ICO is a discounted sale of a cryptocurrency that can be traded for goods and services. Currencies whether digital or fiat are mediums of exchange in an economy, not a fundraising instrument. By buying a cryptocurrency, you take a bet that its value, and the value of the associated economy will rise; allowing you to exchange a greater volume of commodities in future.
Cryptocurrencies support an entire ecosystem of services and not just a company. Floating these blockchain based currencies in the open market presents a completely different set of variables and problems. They are still a relatively new concept and most countries are yet to take a stand. Once you have decided whether an ICO would be the best option for your business, you can start working on how to go about conducting it. Here are five tips to help you out:
Create a Whitepaper
A well-written whitepaper is detailed and easy to understand. It is very often that in the first-place people will look for information about your token and offering. The whitepaper contains all the core information that investors needs to know about the currency and the offering.
It should include detailed descriptions of the problem you are trying to solve, why the problem exists and how your solution will solve the problem. You should present a detailed roadmap outlining your strategy and timeline along with the associated cryptographic functions built into your currency's protocol.
People buying your currency look at your whitepaper to find the justification for the capital being raised in the ICO, so do include a section on that.
Check for Compliance
The lack of regulations on ICOs in many countries has created an air of uncertainty. If your country is yet to formulate laws, investors could suffer significant losses if the final decision of the government turns out to be unfavourable. While some have banned companies from convening ICOs altogether, a few have released a mandate that allows only accredited investors to purchase cryptocurrencies in an ICO. Only a few countries like Japan, Switzerland, Russia and Singapore have offered clear support.
It is advisable to conduct a KYC of all participants to ascertain their nationality prior to commencing the ICO.
Find an Expert Advisory Team if Needed
Since blockchain technologies and ICOs are an uncharted territory for many, convening one could get tricky and prove to be time-consuming. There are teams of experts who advise newcomers and can guide you through the process of developing your platform and structuring your ICO. An expert legal team can also help guide you through any legal and/or regulatory requirements that your ICO may be subjected to.
Reach Out to ICO Listing Platforms
ICO listing websites are a very popular means to promote your ICO and get your name out in the broader community. These are sites which maintain lists of completed, active and upcoming ICOs. Many of them provide their services for free, while other have listing fees to discourage listings for scams. Some of the most popular ones conduct background checks before listing your ICO on their site. Many even provide marketing and promotional services through either their own or through partner networks.
Building an Active Community
The community that grows around your ICO will form the initial user base of your currency. Actively maintaining and expanding this community ensures a strong foundational base for your token.With so many channels available online, building a community has become easier but it still requires an active effort from the team. You must remain active on your channels continuously interacting with your users. Apart from running your own channels, be it on Slack or Telegram, it's always good to participate in open forums like bitcointalk.org. It is the biggest and one of the oldest forums for cryptocurrencies. Having a presence there is very useful when building a reputation in the crypto community.