Today, more and more new projects and start-ups are appearing in the field of blockchain. It is noteworthy that instead of the usual venture financing, ICO is increasingly used on crowdfunding platforms to raise funds from investors.

The term ICO (Initial Coin Offering) appeared by analogy with the IPO (Initial Public Offering), which identifies the initial public offering of shares on exchanges. That is, ICO is the same IPO, only the role of shares is performed by cryptocurrency tokens.

The essence of the technology is that the company releases its own tokens and sells them to investors for bitcoins or ordinary money. And, as practice shows, this really works. Since the beginning of this year, thanks to the ICO, about 130 cryptocurrency projects have appeared that raised more than $ 2 billion of investments.

On average, the ICO takes from 2 to 8 weeks, but a few months (and sometimes even six months) go to the preparatory work. If you are interested in how to successfully pass all the stages of the ICO, read our step-by-step instruction.

Step 1. Develop ideas and pre-announcements

To begin with, you need to decide on the idea for a future startup and find out whether it will be interesting for users. In order to define your target audience, be sure to study the market and analyze the experience of successful ICO.

To find out the opinion of the target audience, you need to create a short description of the project (Executive Summary) and post it on a thematic forum. As a rule, responses from users come instantly since forum users discuss the idea, ask related questions, make suggestions on the functionality of the startup.

If users categorically do not accept the proposed idea or are skeptical about it, it is better to change the initial concept. If the response is generally positive, adjust the project taking into account received comments and recommendations. As a result, you should have an optimized business model and a public offer for users.

If you want to know how successful tech innovation is being led by young entrepreneurs all over the world here’s is 2017 Global Startup Ecosystem Ranking.  The top five regions in that year’s ranking are Silicon Valley, New York City, London, Beijing, and Boston. All 55 cities participating in the research were rigorously analyzed based on their performance and eight factors driving startup success: funding, market reach, global connectedness, technical talent, startup experience, resource attraction, corporate involvement, founder ambition, and strategy.

Step 2. Team formation and company registration

As practice shows, for a truly successful ICO in most cases, a team of 20-30 people will be required.

Among them, there should be programmers, marketing specialists, copywriters, PR specialists, designers, and other narrow specialists. It is important that all members of the team should speak English, because it is considered to be the main language of the ICO, and the main target audience is concentrated in the United States.

When the team is formed, you need to register your company.

ICO, like other crowdfunding technologies, is practically not regulated at the legislative level. Many potential investors are being weeded out because they have no guarantees that it is a diligent entrepreneur, not a scammer and a thief on the other side.

By conducting an ICO on behalf of an officially registered company and thinking through legal mechanisms for protecting investors (for example, repaying deposits in the event of a startup failure), you will increase your reliability in the eyes of investors.

In order to avoid possible problems with the law, register an enterprise in a country with a jurisdiction friendly to the blockchain: the USA, Cyprus, the United Kingdom, Switzerland, Belarus, Estonia or Singapore.

Step 3. Developing White Paper for Investors

At the first stage, you created a draft proposal for evaluation by users. Now you need to create a clean copy with an attractive description of the project for investors.

For this, White Paper is developed, explaining to the user how the project will work. As a rule, it is created in PDF format and then distributed on the Internet.

Investors do not like to read the long and sophisticated White Paper. It is better to write a laconic and concise description that will show the potential investor the benefits of your proposal.

The typical structure of the White Paper for ICO includes the following sections:

• The history of the start-up (how it all started, the idea and the final goal of the project);
• The potential of using blockchain in a particular start-up;
• A brief presentation of the product (what, what for, how it works, etc.);
• Deep description of the product (with characteristics, calculations, graphics, and other visual materials);
• Practices of using the product (where and what it can be used for);
• Description of conditions for investors;
• An analysis of the work done (what has already been done, what is still be doing, what is planned to be done in the near future);
• Description of the team (employees involved, their professional experience and role in developing a start-up);
• A brief summary of the previous paragraphs with the main theses.

You can have a look at good White Papers in terms of structure and design here and here.

Do not forget that your goal is to sell your tokens to investors. Therefore, in the description of the startup, you should try your best to persuade the investors why your project is worth investing. So, give the full information about your tokens: what they represent, what function they perform (these are stocks, digital assets, means of payment or something else) and how they differ from existing tokens.

Besides White Paper, you can prepare two more documents. This is not necessary, but it will favorably set you apart from other projects:

• FAQ – a section with the most popular questions on the startup and detailed answers to them.
• Tutorial – a detailed guide on how to use the service.

Step 4. Develop and launch the site

The site performs several functions at once: informative (tells the users about the start-up), advertising (promotes the project) and selling (as a rule, the sale of tokens is carried out through the site).

Most companies create a one-page landing page with a standard structure containing information about the ICO:

• Short description of the ICO;
• Presentation of the proposed product (you can add a themed video);
• Scheduled workflow;
• Presentation of the team (preferably with high-quality photos and links to the portfolio);
• Documents (public offer, White Paper, Tutorial, FAQ);
• Investor’s personal account (with a form for crediting tokens in accordance with the terms of the offer);
• Startup partners;
• Subscription form;
• Contact information (e-mail, projects in social networks, etc.)

Initially, users will go to your site, just to learn information about the startup. But with the beginning of the token sale, a huge stream of users will crash onto the website. Therefore, immediately think about a good hosting, which will ensure the smooth operation of the site at peak loads.

In addition, take care of protecting the site from DDoS-attacks in advance, which often happens when you launch the ICO.

When the site is already created, it’s a good idea to run an emailing for subscribers. Send out news of the project, reminders of the start of the token sale, as well as links to the main documents (first of all, White Paper and the offer) and useful content.

Step 5. Advertising and promotion in social networks

Your main task is to attract as much attention to your startup as possible.

The most obvious option is to launch advertising through social networks (Facebook, Reddit, Medium, etc.). Use all possible channels, send White Paper and links to your site to potential investors, translate the main materials into other languages and place them on foreign sites.

However, if you want to have a wide audience and create a really effective advertising, you’d better launch a full PR-campaign. Part of the work can be done by regular marketers, but for maximum effect, it is recommended to involve specialized agencies.

A special category is the so-called business angels. They are experienced participants of crowd-hosting programs, whose opinion is already considered as an expert one and can significantly influence the decision of other investors. In order to notify them of their project and get their support, it is advisable to actively promote your project on rating crypto-exchange forums, for example, on Bitcoin Talk.

A huge advantage will be the placement of the project on popular ICO-trackers. They are services that collect and analyze information on topical crypto-currency start-ups. Experienced investors invest in projects only after their approval on authoritative trackers.

Note that top trackers (ICO4You, ICOAlert, ICORating, ICOTracker, TokenMarket, etc.) charge a fee for posting information. On average, you will have to pay from $1,000 to $3,000 for their services.

Step 6. Launching a bounty campaign

This is an incentive program that increases user activity and makes the project more recognizable.

As a rule, companies distribute free tokens to users who have fulfilled certain conditions, for example:

• they showed high activity in social networks (they subscribed to all the accounts of the project, put a lot of likes and regularly make reposts) or on thematic forums (for example, they raise the rating of the project on Bitcoin Talk);
• they were among the first who subscribed to an emailing;
• they translated content and documents into other languages;
• they wrote an advertising text for the project and posted it on a themed site or on their blog.

To prevent the bounty program from becoming an aimless distribution of assets, set a barrier to entry for participants. For example, 1000 subscribers for users of social networks.

Step 7. Token creation

You can create your own tokens on BlockChain.org. But this requires a minimum of one thousand dollars to get the source code in blockchain and a team of high-class programmers.

Fortunately, there are platforms that offer users to exchange the cryptocurrency for their own tokens.

These include Ethereum, Waves, NEM, NXT / Ardor, Counterparty, and BitShares. All you need is to register on the chosen site, fill in the appropriate form, purchase an internal cryptocurrency and exchange it for tokens.

It is most convenient to create tokens on Ethereum because this is the only platform with built-in function of smart contracts.

Step 8. Token distribution

All previous stages were kind of a preparation, and only now it will be a question of pure ICO. Investors are found, the advertising campaign is launched, the site is created, so, it’s time to sell your tokens.

It is very important that investments flow into the project in the first hours of trading then it will help the business move on much easier. How can this be achieved?

• Introduce restrictions on coins. At the stage of preparation for the ICO, give information that the number of coins will be limited. If the project looks attractive to investors, they will be rushing to buy your tokens right at the beginning of sales.
• Buy your tokens. You will not violate any ICO rules, but you will demonstrate the viability of the project (other users do not know who exactly buys tokens, but they see that it goes successfully).
• Encourage investor activity. Think of a system of bonuses for the first investors. For example, give a few free tokens to users who purchased within the first 15 minutes after the opening of the ICO.

If your tokens were conceived as a means of payment, be sure to release them to the crypto exchange.

If you created them on Ethereum, you can easily trade your cryptocurrency on the domestic stock exchange of the Ethereum. It will not be superfluous to create offers to sell tokens on other popular sites (for example, GateCoin, LocalTrade, and BitFlip). Then your cryptocurrency will become recognizable among active investors and traders who are in constant search for profitable objects for investments.

To sum it up, it should be noted that the process of the ICO launching is quite complicated and has several stages, but nevertheless, it’s fairly possible to launch the ICO successfully and bring millions of followers to your startup and find investors for your fun projects.

 

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