7 key factors of a sucсessful ICO

As you might know the ICO market is experiencing explosive growth. In just a short period of time, token distribution has become the most efficient investment attraction method. The ICO market has already surpassed venture capital funding, especially in terms of funding speed. Therefore, if you want to gather a significant amount of money to develop your project at a rapid pace, the time to start preparing your own ICO is now.

However, despite such wild market growth, it has become harder to conduct an ICO with each passing day. What are the reasons for this? First off, this is because the number of companies who are holding ICO’s is growing in a geometric progression.

You can see here at the beginning of 2017 4 to 5 ICO’s were popping up each month. Now, however, the amount of new ICO’s per week ranges in the hundreds! And all of these projects are battling hard for investor wallets. In order to have a chance to win in this “tug-of-war”, it’s critically important to distinguish yourself amongst the informational noise. But this requires some serious effort.

A few months ago you could make a landing page, write a Whitepaper, post an announcement on bitcointalk and gather tens of millions of dollars. But, in the current market situation, a whole range of tasks and considerable work is required to have a chance at success.

In this video, we will share with you 7 essential factors you definitely need to consider before starting your own successful ICO.

If you still aren’t aware, or don’t fully comprehend what an ICO is and why they are needed, then check out this article first. 

So, what are the key factors to a successful ICO?

Most entrepreneurs who attempt to hold an ICO, either don’t understand this factor or underestimate it. You might remember, just a few months ago, the market was so raw that even the most ridiculous ideas could gather huge sums of money. As a result of this, the idea that ICO’s could be used to gather tens of millions of dollars for practically any project became engraved in the minds of entrepreneurs. Currently, though, the situation has drastically changed.

If in July 2017, the amount of ICO’s that managed to reach their lower limit for crowdfunding (soft cap) was over 40%, you should know that now this amount is at around 3 to 5%. Considering this trend, it is evident that projects which aim to develop the Blockchain infrastructure have a higher chance of success, as opposed to more traditional projects that want to build a hotel, for example. But, even so, a hotel building project still has a lot of chances for success, if the project creator positions the project correctly in the market. 

In order for your token to become attractive for investors, it’s necessary to follow five key points:

  • First, build a token that fits within your project organically and has proper legal structure. You can have a utility or a security token, or even a mix of a few types of tokens that will serve the purpose of fulfilling internal goals of your platform.
  • The next important point is to properly substantiate to investors why the token’s price will increase in the future.
  • Next you need to build a model for token distribution amongst investors, the project team, advisors, and bounty hunters.
  • After you build the token distribution model, then it is time to build a distribution model for funds gathered during the ICO, keeping the company’s roadmap in mind.
  • Finally, you have to develop a bonus and discount system, and determine whether you need to conduct a private pre-sale and a pre-ICO.

A representation that sells consists of:

  • A quality website with main translations, including:
  1. Landing page with a detailed description of the project, token structure, bonuses, distribution models, leading to a subscription to project’s news (email, social media) or project chat rooms.
  2. Investor account, where an investor can carry out a payment in various cryptocurrencies (as a minimum ETH and BTC).
  3. Affiliate program
  4. A FAQ section.
  • A detailed Whitepaper, which will present your project in the best light for investors in multiple translations.
  • A quality video about your project and ICO.

Here’s what you must do fundamentally:

  • Create your Medium blog. We know based on a review of successful ICOs that It’s necessary to make a minimum of 2 posts about your project per week.
  • Actively participate in social media (Facebook and Twitter), publish content, order reposts and comments from opinion leaders.
  • Create and manage your project’s thread on bitcointalk.
  • Post your ICO on all ICO trackers
  • Publish articles about your project on popular crypto media. This is especially important since a lot of investors turn to Google as soon as they see a new project in order to find information about it. And if nobody writes about the project, investors will see this as a warning sign.
  • Practically every ICO investor refers to some Telegram-chats or signs up for Telegram-channels. This messenger aggregates almost all of your whole target audience. Thus, its use is highly important. So, buy advertisements in thematically aligned channels and hire people who will advertise your project in chats.
  • A vital marketing channel for any project is – YouTube. Lot’s of investors refer to channels which are devoted to crypto trading and investments in cryptocurrencies. Additionally, this marketing channel isn’t filled up to the brim, and, at the time of this video, provides for a very high ROI.
  • Additionally, you need to use standard marketing channels, such as: Facebook targeting, contextual Google AdWords ads, CPA-networks, Programmatic media advertisements buying and all other conventional marketing sources. Retargeting bases from already established projects provide for an especially good effect. That is because the target audience of crypto-investors is relatively small at the moment (according to some estimates, a few hundred thousand people).
  • The next useful marketing tool is an affiliate program where you provide investors with a small commission of the funds acquired as a result of attracting other investors.
  • Additionally, it’s necessary to develop terms and conditions of your bounty program, through which you will distribute tokens based off of specific actions done online, such as likes and sharing posts on social media.
  • Team founder and member public speaking engagements on thematic crypto-events and meetups are also very important. Here, you can not only find new team members or partners, but even your first investors for your private pre-sale, and significantly raise public trust towards your project. You will also benefit from publishing reports and providing recaps from events on social media and blogs.
  • And the final part of your marketing strategy requires selling your project directly to institutional investors (crypto-funds, which invest in ICO’s). Working with them is very important since some projects can acquire about 30-40% of all gathered funds from institutional investors.

At the time of this article publishing, in most countries, there is a full absence of a regulatory framework and laws on cryptocurrencies. Some countries, such as China, for example, has banned ICO’s completely. The amount of judicial practices related to ICO’s  is relatively small. Often, even successful ICO’s can’t do something as trivial as collect money in fiat (fiat are what regular currencies, like the dollar are called). This is especially true if the amount of gathered funds exceeds $10 million. Moreover, the lack of a developed legislation allows investors to make legal claims towards the founders of projects. For example, you may have heard about the first collective investor lawsuit which is taking place against the founders of the Tezos project. Therefore, when you carry out your ICO, you need to carefully work out all legal questions in order to minimize risks involved in withdrawing fiat and possible future legal claims from investors. Here is what you need:

  • First, find the right jurisdiction for establishing a company and find a bank that will open account to work with cryptocurrencies.
  • Second, develop internal corporate documentation for your ICO project and carry out a legal analysis of your Whitepaper.
  • Together with lawyers, develop measures that will decrease tax risks, as well as risks associated with violating legislation for counteracting illegal financial activities and terrorism financing.
  • Develop measures that will decrease risks pertaining to recognizing tokens as securities.
  • Develop an AML/KYC policy in your project, following legal requirements of your country where your company is registered.
  • Develop investor and user agreement.

Now this isn’t all of the required documentation, but serious work with lawyers is necessary.

One of the first criterion for evaluating and scoring a project by investors – is the presence of a team of founders, who have enough experience and skills to achieve project success. If for example, you have a fintech project, then your founding team needs to have people with a good background in IT and in Finance. If you haven’t found and suitable partners, then start searching right now. This will not only add confidence to your investors but will allow you to look at your project from another perspective.

Aside from the team, having renowned advisors from the market, who approve of your project or idea can act as a big bonus for a team. Advisors will provide you with strategic advice and guide your company in the right direction. Moreover, investors are much more willing to invest in projects which have been approved by opinion leaders. To them, this acts as a guarantee that the project isn’t a scam, and that the market will actually demand it.

In order to conduct a successful ICO and attract funding to your project, you must develop all of these aspects. The omission of even one of those can lead to investors bypassing you, or even after a successful fundraising campaign, you will face serious problems in the future that will brake or completely stop the development of your project.