Introduction to the ICO process

The ICO (initial coin offering) market is ever growing. Since the first ICO in 2013, the market has skyrocketed and total amount raised through ICOs since the beginning is estimated to be above $20BN with Europe and Asia being front runners. Needless to stay the ICO model of business fundraising is here to stay. It presents unique opportunities for radically changing business models, and opening up business fundraising industry whereby now many ordinary investors can take part. The venture capital has traditionally been reserved for wealthy investors and is subject to stringent regulations. But this is changing.

To quote Binance CEO, CZ, 'Everytime there is a breakthrough in human freedom, there is great progress'. Crypto is playing an important role in opening up investments, new financial asset classes, markets and how we relate with money. This is something that cannot be simply wished away. ICO model of funding startups is therefore expected to accelerate in many areas. I think the model will be even more applicable to developing markets in Asia, Africa and South America where traditional venture capital model is broken or non-existent. Even in developed markets such as Europe and North AMerica, small scale investors now have an opportunity to become investors in projects of their choice. Boundaries are being shattered, opportunities are opening up and the ICO model has left the station. Governments are trying to establish sandboxes, and suggestions of national digital currencies being now part of the conversation. For entrepreneurs, investors and crypto enthusiasts, getting acquitted with the ICO process is as important as ever before.

Here is a breakdown of the main aspects that you need to be aware of.

Ideation/Whitepaper/demo:The first step is to clearly explain your idea in a technical whitepaper. The whitepaper can undergo various edits and modifications throughout the ICO process in order to incorporate changes that are needed to make the project even better. It is also important to have a 'lightpaper' or a one pager/ pitch deck that simply explains the idea to a layman without the technical details. This is important because not all investors have a cryptography/computer science/ economics background. A lightpaper or pitch deck is important for simply highlighting the benefits of your products and why people should be excited and want to participate in it.

Structuring the token sale: This is incredibly important because it will enable investors to know how to participate, what to expect and how they are going to benefit. If the token distribution will be through Airdrops (free distribution of tokens), ensure you highlight that very clearly. It is important to evaluate whether the token is a security token or a utility token. Security tokens are gaining more popularity even as the debate on how regulation will impact them ranges on. In the whitepaper, it is important to give some thoughts and time on token breakdown aspects such:

Token name and symbol Token supply: (also an indication whether the tokens will be pre-mined) Softcap and hardcap: softcap is the least amount needed for the token sale to be termed as a success. In determining the softcap, take into consideration the cost of launching the project. Hard cap is the maximum amount that will ever be available. If the softcap is not attained, investors should receive back their money. For the founders, it is important to have some understanding of token economics in setting up the soft and hard caps that are based on thoughtful analysis. You can read more about softcap and hardcap. Some founders also consider the option of seed funding before undertaking the main ICO. seed funding is similar to angel funding for any startup. If the founders do not have any capital either from previous business success, personal wealth etc, they can seek an angel investor to bankroll the project at least until ICO stage. There are costs involved such as marketing, demo product development etc. founders then make an arrangement with investors regarding token allocation after ICO, exit strategies etc.

Tokensale website: not to be confused with the main project website, this is like a landing page containing all the information that investors need about the project. The website should contain:

ICO date countdown

details of the project (value proposition)

how to take part in the ICO (steps)

Roadmap

FAQs,

Team profiles, advisors, partners

Links to whitepaper, Github, social media accounts

It is important to highlight team profiles and their linked to at least one social platform, most preferably, Linkedin. A good team should essentially have some experienced blockchain developers, community managers/CMO and business developers/designers. These three fields are very important in building a unified and diverse team that brings in experiences from various fields. As much as possible, it is important to have core team in-house while other tasks such as content, press release distribution, etc can be outsourced. Also if you have advisor or partners, put them on the site. It is important to have an advisor who has legal experience to help in navigating issues related to KYC/AML and other contingencies. Never put someone on the team if they are not aware or they do not exist. This will seriously erode the credibility of the whole project.

Community building: community is everything, i repeat, building a enthusiast community around your project cannot be emphasized enough. Most of the successful projects have a strong community network. This akin to network effects that makes a crypto project to succeed. Investors are also users and this creates a powerful engine of growth if the community is excited, incentivised and love your product. After the ideation and whitepaper, building a community is next step. It takes time and patience is needed. This is also one of the most daunting tasks. Telegram is the main platform for building community where updates, suggestions about the product are posted. Reddit and Bitcointalk are also important crypto forums that you need to have a presence. A vibrant twitter account is also necessary. Building these platforms takes time and you will need a team for sharing content, information, updates, press releases. Ultimately when the community is convinced about your project, they will be undertaking the process of promotion by themselves. They can even start creating content for free around your project. At this level, your project will be destined to succeed. Even after the token sale these communities are important part of crypto growth. EOS has a done a very good job in this aspect. There are EOS communities in various cities around the world that run independently as well as hackathons etc. Binance also has binance angels which is a network of volunteers that help in various activities such as:

organizing offline events building and maintaining social media communities Translation of content into various languages reaching out to local influential media outlets

All these are important aspects that help in building a community and a following around your project. Others such as also have vibrant online communities. The good thing with this process is that the team does not need to be in-house. Crypto and blockchain is about decentralized autonomous organizations so you can build a team of enthusiasts throughout the world.

Marketing PR and branding: being supper creative with marketing and creating awareness with your product is key. Even though traditional methods such as writing creative press releases are still important, other PR tactics such as memes, tapping into popular culture and viral messages, videos and snippets is very important. THis is a continuous and ongoing process. Communities can help in spreading messages and content far and wide.

Exchanges and listing: listing on exchanges and ICO rating sites is important step. It enables investors get to buy the tokens. furthermore, listing on established exchanges requires some traction such whether the ICO has been rated by rating platforms, whether it has a Bitcointalk Announcement thread, Reddit and number of people on Telegram channel. This preparation should start at the community building level.

That's it for now, later on i can delve deeper into breaking down the above processes in later posts.

If you wish to read more I have shared more details of my research and work with some of startups in the ICO process on coinweez crypto site.

I am excited about working on crypto projects and bringing them to life. In case of any assistance in any area of ICO process: from ideation, whitepapers research, pitch-decks, content and press releases, get in touch on chris@coinweez.com or via Telegram



