Unlike a few years prior, startups now have a contemporary means of raising capital aside from the conventional venture capital route. This new option is called initial coin offering or ICO.
Simply put, ICO is a fundraising means where a company releases their own digital currency in exchange for say, Bitcoin or Ethereum. The whole idea is to entice investors who are in the lookout for the next big cryptocurrency score.
Amazingly, this new trend is quickly picking up steam. With people spending millions of dollars on ICOs recently, the trend shows no signs of slowing down. That being said, if you’re a startup, it might be a good idea to investigate if an ICO would be a good fit for you.
However, since ICOs are considered relatively new, it is likely that you’re also still trying to find your way around it. Fortunately, you now have the option to seek the help of a seasoned ICO consultancy to help ensure you are on the right path.
Aside from investing in the help and guidance of a competent ICO consultancy, consider it wise to keep the following ICO launching basics in mind:
It uses a different approach
In the past, raising funds primarily involved pitching ideas to venture capitalists. While this alternative is still available, it’s no longer the only option you have at your disposal.
Of course, angel investors and VC firms are still worth a shot but an ICO might be a much better strategy to try right now. Make no mistake about it though. An ICO can be as challenging as securing venture capital. It’s upside however is you’ll have more command over the process.
Competition is intense
If you’re new to the whole ICO space, you need to remember there’s more to it than meets the eye. For starters, it would be best not to assume investors will be flocking to invest. While there are a lot of factors involved in the success (or failure) of an ICO, many believe marketing plays a key role.
Still, many ICOs have been quite successful. In fact, a CNBC.com special report indicated that the total amount raised through ICOs each month is in excess of $100 million.
While this is definitely a welcome development for many, this surge in ICOs can also mean a significant increase in the competition for investor support. If you want to set your company apart from the others in the ICO playing field, you need to educate yourself when it comes to the best practices and perform at a level that’s as good as those companies vying for initial public offering or IPOs.
Communication is crucial
No two investors or companies are the same. The same is true when it comes to ICOs. With that said, your ability to communicate effectively is just as important as the marketing strategy you employ.
The manner you communicate with investors can be crucial to your success. Have you meticulously outlined and covered all the important details of your ICO so making a final decision is easier for investors? How about your vision for the company? Where do you see the organisation moving in the next few years?
As a general rule of thumb, you’ll have a better chance of getting the support you need if you have a crystal clear and well-defined road map. Increase your chances of success by making sure you have all the bases covered.