Initial coin offering is a trendy financing method commonly used by cryptocurrency projects to raise capital. It allows companies to raise capital from investors without going through the rigorous and regulated processes required by financial institutions and venture capital firms.
However, lack of regulation on ICOs has resulted in the rise of fraud and scams, looking to prey on unsuspecting and uninformed investors.
In the following section, we look at the benefits of initial coin offering and how ICO marketing agency can help with ICO process.
Initial coin offering – How does it work?
Raising money through initial coin offering involves three simple processes. Firstly, the cryptocurrency startup creates a whitepaper detailing among other things, what the project is about, what the needs the project aims to fulfill and how long the ICO campaign will run for. In the next step, the company issue
Finally, in the event, the funds raised do not meet the minimum amount required by the company, the money is returned to the backers and the ICO is deemed unsuccessful. Conversely, if the fund requirements are met within the specified timeframe, the money is used to further the company’s goals.
Initial coin offering benefits – What’s in it for investors?
Although tokens do not have any inherent value, ICO offers a wonderful opportunity to buy cryptocoins that have the potential to increase in value in the future. If this comes to pass, early investors will recoup amazing returns. In fact, tokens purchased through initial coin offerings returned an average of 12.8 times the initial investment.
The ICO space is just getting bigger and bigger as new companies continue to hold successful initial coin offerings. Take Ethereum for example. At its ICO debut in 2014, ether was priced at around $0.30; today it trades at just below $140, making significant gains within that period.
What can make an ICO to fail?
A recent research carried out on 2017 ICOs found out that 15% failed before funding, and another 31% failed after fundraising, representing a 46% failure rate.
Even the projects that are still going, 13% are classified as “semi-failed” because their teams have gone off the radar or their community has withered away. This means that the failure rate of 2017 ICOs stands at 59%.
Although these statistics point to the risky nature of ICOs, they strongly suggest that a lot of work is needed to establish a successful ICO.
So what do you need to hold successful ICO?
In order to create and execute a successful initial coin offering campaign, you need to have the right strategy that will enable you to attract investor and funding you require. This strategy should therefore include among other factors:
- A proven team with the ability to execute
- Technology check with a well-researched whitepaper
- Business viability check
- Transparent ICO process
- A defined marketing strategy
In addition, you need a strong ICO/STO advisory team to help with the legal and marketing aspects of the initial coin offering process. You don’t want your ICO to fail because you partnered with wrong advisors that didn’t take enough care of your project. In short, you need to find an ICO marketing agency that has experience and expertise to promote your ICO campaign to potential investors for successful crowdfunding. Not only will this give you entry to deeper funding pools and broader brand awareness, but it also allows you to raise funds faster.
TokenMinds ICO/STO marketing agency is committed to helping companies raise funds through initial coin offering. From whitepaper and website design to road shows and investor outreach campaigns, we can help you reach raise the millions you need and achieve success. Moreover, we only promote highly-vetted ICO projects, giving investors a wonderful opportunity to minimize risks when investing in cryptocurrency.
If you need any assistance with your ICO campaign, simply get in touch here.