- What is a Token Presale?
- Benefits of conducting a Token Presale
- How to launch a Token Presale
- How to attract investors to your Token pre-distribution event
- Final words
A Token Presale is a fundraising strategy that helps early-stage blockchain projects to offer tokens before the development is complete. Through the technique, projects aim to raise funds to continue developing the business or finance the activities leading to the Initial coin offering (ICO). Because of the elevated risks, investors at the Token Presale stage buy the coins at discounted prices. Keep reading to discover why blockchain projects use a Token Presale.
What is a Token Presale?
Some blockchain projects perform a pre-sell before the initial coin offering (ICO) takes place. During a Token pre-distribution event, specific investors buy tokens at a discounted price. This is a win-win scenario for both the developers and the early investors if things work as anticipated. While developers will secure funds to complete their projects, investors will buy the tokens at affordable prices and sell them at a higher rate in the future. Some projects can use a Cryptocurrency presale to create hype around their project ahead of the Initial Coin Offering.
Benefits of conducting a Token Presale
Token pre-sale investment has become a popular way of buying a stake in a crypto project before it goes public. The approach allows risk-seeking buyers to invest in projects that can gain momentum and deliver mouth-watering returns. A Token pre-distribution event has multiple benefits for project developers and investors.
Investors participating in a Token Presale enjoy the following perks:
1. Discounted prices
A prominent benefit of Token pre-selling is that it attracts exclusive discounts. Furthermore, many investors gravitate toward this approach because they enjoy a Token pre-sale bonus. If the project picks up well and gains popularity, investors will make a kill by selling their tokens at higher prices.
2. Exclusive benefits
Besides accessing the Token pre-sale allocation at discounted rates, the earlier project investors can also enjoy excellent benefits, such as special rewards, exclusive memberships, and power in decision-making.
3. High returns
Granted, a Token Presale has elevated risks. The project might go south due to multiple factors.
However, if the project gains traction, the early investors will resell their holdings at higher prices. For example, the early investors of BTC or Eth bought the tokens at a low price. They made millions afterward when the tokens gained value.
At the same time, Project developers can reap various benefits from the pre-launch Token sales. Here are the key ones:
4. Boosts project development efforts
A project can use the amount collected through the Token pre-sale allocation to conduct marketing and operational activities. For example, a project can use part of the amount in marketing, project development, advertising campaigns, and constructing infrastructure.
5. Boosts the popularity of the project
A pre-launch Token sales event can create buzz around your project, boosting its popularity. The project can gain legitimacy quickly and attract more investors at the ICO stage.
6. Market knowledge
A token pre-launch helps developers to understand the market. The feedback developers get once the presale is live allows marketers to evaluate the interest level of the market. Developers can also assess the areas to improve to boost their chances of success.
7. Acts as a beta introduction
A Token Presale targets a small segment of the market. This makes the procedure more manageable than the primary Initial coin offering (ICO). In case of an issue, a small group of investors can be affected. Also, developers can quickly fix the problem.
At this stage, developers might discover bugs and vulnerabilities that they can fix before the main ICO happens.
How to launch a Token Presale
The ICO pre-launch Token sales function by registering multiple coins at reduced rates. The event targets both small and elite investors. Companies offer a limited number of tokens at discounted prices.
Developers create a distinctive digital agreement from the coins listed at the primary ICO. This helps to avoid confusion because early investors are likely to be paid a higher rate. Furthermore, the initial buyers will enjoy special deals, Token pre-sale bonus, and elite clubs.
How to attract investors to your Token pre-distribution event
The Cryptocurrency presale event is designed to attract investors to help you popularize and provide funds for project completion. At the stage of a Token Presale, the project is incomplete. This means that the pre-selling event is risky. However, you can attract more buyers to your project by using various tactics, including:
- The whitepaper: a whitepaper is an essential document explaining your project to your potential investors. The paper explores the problem you want to solve, your objectives, tokenomics, and your team. Once they read the whitepaper, investors will determine whether to buy your tokens or give them a wide berth.
- Innovative idea: Your project must be creative and imaginative to attract investors. The idea must explain how to solve a specific problem in the market.
- Regulations: potential investors are likely to evaluate whether a project adheres to the rules of the specific country. For example, the project must comply with SEC regulations if you define your Token as security in the US.
- Your team: investors will check your team members to evaluate whether they have the skills and experience to deliver the objectives. For example, suppose your project is about electric vehicles. In that case, investors will check whether your team has experience in the motor vehicle industry. Also, IT specialists and business managers should be among your team managers.
- Premium perks: potential buyers of your tokens will also check the exclusive benefits they’ll access via your Token pre-sale investment.
A Token Presale has become a popular strategy for early-stage crypto projects. The approach helps developers access finances they can use to complete their projects. Also, the raised finances can be used to fund operational and marketing activities.
Early investors also benefit from the technique in various ways. Buyers can access the tokens at discounted rates. These investors will sell their tokens at high prices at the main ICO. Also, the investors can enjoy exclusive perks like elite memberships and unique rewards.