5 Steps for Launching a Successful Initial Coin Offering (ICO)

Before you can proceed with the launching of an ICO, you might first consider defining and understanding what an Initial Coin Offering really is. An Initial Coin Offering is similar to an Initial Price Offering except that in this case you are dealing with cryptocurrency. As such, while in an IPO you are required to buy stock and invest in them, an ICO refers to the buying of digital coins. This is one of the innovative and digitalized ways of investing in upcoming companies as long as you have a cryptocurrency wallet for your cryptocurrencies.

ICOs are found in multiple economies that have adopted the digitalized investment methods. Blockchain technology and Blockchain Development is advancing every other day with various innovators focusing on making the Initial Coin Offering more attractive for the users. Various investors have also recognized the significance of ICOs in multiplying their wealth as more users can access online services.

For example, Filecoin is one of the leading ICOs in 2017 having raised over $257 million. Bancor has also attracted many investors and 2017 has seen it raise about $153 million, which is a great achievement.

Before you can launch an ICO, you ought to understand that unlike the IPOs where investors own a portion of the company, an ICO does not even give the holder any voting rights or equity ownership. Once you launch an ICO, your company graduates from being private to a public company. The aim of launching an ICO is to be able to lift your financial status without having to borrow from a bank or other financial institutions. Today a lot entrepreneurs are using the ICO to bypass traditional sources of capital such as Venture Capital firms to do an ICO.

You might want to consider doing a pre-ICO to help you review the economy in order to predict how consumers are going to act towards the ICO. The pre-ICO basically acts as your roadmap where you allow the investors to start buying the digital coins before the actually crowdsale begins.

How to Launch an ICO in 5 Steps

Below are some of the steps you need to take to be able to launch a successful ICO. However, you should note that while our website aims towards offering you some personalized advice about ICOs, this is not legal advice.

Step 1

You should begin by considering what the legal aspects of your ICO are going to be alongside the white paper and your company’s financial details. For instance, if you are targeting investors from the United States, you have to inquire and research on their accreditation status.

Although you do not need a blockchain to be able to trade your digital coins, you ought to consider a blockchain application from the many introduced by varying blockchain developers based on their success. Etherium is the cryptocurrency commonly used across the world where you only need access to its address and then start collecting your funds after launch. Etherium and Bitcoin provide a base for your digital coin offering as the most efficient and effective blockchain Apps available.

Some of the essential requirements you need to have before you launch your ICO include:

• The appropriate back-end infrastructure for your digital currency by using the best custom software        
   development and Blockchain programming experts

• A roadmap alongside a whitepaper, which will detail what you are trying to accomplish and how

• Clearly analyzed regulations and adherence to avoid unnecessary violations

• Managing your escrow account and being able to maintain it effectively.

• Proper public relations and marketing
• Setting up a legal entity with lawyers who are experienced blockchain solution providers, the location  
  and structure will be important, several successful ICO’s including Ethereum, are operating as a Swiss-
  based foundation. Quite a few other ICO's are structured through Delaware, which is already the most 
  popular place to incorporate companies. Singapore is another popular destination. 

Step 2

After successfully completing step 1, you should create a new currency for your digital coins on protocols like Etherium that have proven to be successful over time. You can consider various blockchain apps to use as a platform for your ICO operations depending on what your expectations are.

You should consider using a blockchain application that attracts more investors and one that is well known in the market. This is because the blockchain technology has just been founded and various blockchain developers have applied varying principles in the creation of their blockchain applications. How successful you manage to pull out this step is going to depend highly on your ability to find the best cryptocurrency developers able to deliver top quality blockchain technology solutions. 

Additionally, it is important that you consider designing a decent prototype to show your potential investors. Thus, another reason why you need to hire a highly qualified and experienced custom software development team with strong capabilities in blockchain application development. This expert team of blockchain developers will also be in position to help you with tech architecting and planning your tech roadmap as required.

Step 3

Assigning of an arbitrary value for your digital coins depending on the network’s worth at the time of ICO launching. Just like in the case of IPOs where the stock in the market is priced based on the company’s market value. Your ICO is allocated a certain price that is going to attract more investors to buy your digital coins with fairness to your company and the economy. The main aim is to ensure that the arbitrary value is set in such a way that the company reaps the highest possible benefits through the creation of the required funds.

Step 4

The fourth step you need to take is to determine the price dynamics depending on the laws of demand and supply in the economy. The division of token in your ICO is based on the investments made by each user. That is, the more the investments a blockchain technology user puts into your ICO, the more the tokens allotted to him/her. This step is usually dependent upon the arbitrary value you placed for your digital coins.

To be able to complete this step, you ought to consider some of the pricing mechanisms applicable for ICOs. They include:

• ICO with a price rise- In this case, the ICO uses a fixed exchange rate where the first investors buy the digital coins at a lower price. The price increases steadily over time such that the last investors to buy your digital coins get them at the highest current price, which is still not the best price for the product given that the price will keep on rising.

• Undetermined Price ICO - Here, the developer may opt not to sell his tokens and the investors obtain them depending on the level of their investments thus obtaining 100% ownership.

• Fixed Price ICO - The price of the token in this price mechanism are fixed and a freezing period is reached where the investors can no longer trade in their coins.

• Dutch Auction ICO - The token prices in this case are high at the beginning and as the selling period progresses, the prices decrease. It is actually the opposite of ICO with a price rise.

Step 5

Creating a public relations team to help market your ICO will go a long way in enhancing its success as well as inviting more users to buy your new product. You should aim to promote the participation of the users to ensure that the actual price of your currency surpasses the allocated ICO price. This way, you will be able to generate more income for your company as was your initial intention.

One way of achieving step 5 is by conducting a roadmap where you can meet the prospective investors, pitch your ICO idea to them, and get their reactions. You are now ready to launch your ICO. 

For more information and advice on ICO's or Blockchain technology implementation in your current business, please contact blockchain software development experts at Venture Aviator  which is a leading custom software development company and a blockchain solutions provider.