Guide To Launching An ICO
Launching an ICO
ICO’s are raising money at phenomenal rate (over $1B in capital) and there’s no sign of it slowing down. This growth in capital makes it an interesting fundraising option for new startups, one that could see them reach fundraising targets overnight. However, the process of planning, setting up and launching an ICO can be quite challenging.
For this reason, we have created this guide to provide an overview of the various stages involved with how to launch an initial coin offering.
Who Can Hold an ICO?
Innovative startups that are looking to host an initial public offering (IPO) could look to hold an ICO as an alternative. The main advantages to hosting an ICO over an IPO is that there is less government regulations to follow and funding targets could potentially be achieved overnight.
ICO vs IPO
So, ICO is the new IPO, true or false? While this statement has some truth to it, the reality is that they are quite different methods of crowdfunding.
The main difference between ICO and IPO is that:
- ICO’s receive funding for projects on the blockchain through cryptocurrency
- IPO’s distribute equity which often hold voting rights in that company (ie your share holds stake in that company)
Do you really need a Blockchain and ICO?
Still wondering whether to host an ICO or IPO for your new business? Perhaps answering these questions will provide a more defined answer.
- Will your businesses product or service benefit from blockchain technology?
- How will your future products or services link with a blockchain token?
- Will the token value increase as the business succeeds?
Pre-ICO Token Sale
The aim of the pre-ICO is to raise enough funds to carry out the main ICO crowdsale. This is completed through the sale of a small amount of the total tokens. To avoid a big change in token price, the pre-ICO and main ICO are held in relatively quick succession of each other.
Who can invest in a pre-ICO token sale?
The pre-ICO can be open to:
- The general public
- Private investors (through invitation or signup to a whitelist)
Best Platform to Launch ICO
Is there a best platform to launch ICO? and if so, what is the best ICO platform?
How to Create ICO Tokens (On Ethereum)
To create Ethereum tokens, you need to visit the Ethereum website and download their wallet. Once you have downloaded the wallet, you can begin the token creation process by following Ethereums create your own cryptocurrency guide.
Token Distribution For ICO
This step in setting up an initial coin offering requires you to decide the type of token sale structure you would like to follow.
Token sale structure examples include:
- Capped First-Come-First-Served (fixed tokens, fixed price)
- Uncapped (unlimited tokens, fixed price)
- Capped Auction (buyer bids their suggested token price and total sale spend)
- Uncapped Auction (buyer bids their suggested token price and total tokens)
- Capped with re-distribution (buyer bids a suggested total sale spend)
- Capped with parcel limit (fixed tokens, fixed price with a token limit to each buyer)
Creating an ICO Landing Page
Before you submit your ICO to a listing and rating site like CoinRating, you will need to make a landing page. This standalone web page will be the main lead generation source and information hub to your potential investors during the ICO.
Discover what to include in an ICO landing page by checking out a guide on the key elements of an ICO landing page.
Creating an ICO White Paper
Along with an ICO landing page, your ICO will need a white paper. This is essentially a detailed business plan created for potential ICO investors, to inform about information on the current market, growth anticipations for the business and people involved within the business.
It is important to note that the task of creating an ICO white paper can be challenging as it must be written in a style that encourages investment rather than pushing hard for it.
Cost of an ICO
Prior to launching an ICO, it might be worthwhile knowing that the overall cost to launch an ICO could be anything from a couple of thousand when organising each task in-house on an extremely tight budget, to 20 BTC ($179,620.10) using ICO launch services group ICOBOX.
The total price is accumulated through tasks such as:
- White paper creation
- Website development
- Smart contract development
- Smart contract audit
- ICO project management
- PR and marketing services
- Legal services
So if you’re looking to launch an ICO for free and complete all of those tasks yourself, you may have to think twice.
ICO Team Members
Alternatively to outsourcing tasks, you could hire an in-house ICO team that ideally is highly skilled in all areas of ICO development.
Finding an ICO Team
ICO team members are probably one of the most important parts of your ICO. Having a team with lots of technical expertise will not only save you from outsourcing a task like smart contract development but also potentially increase investment, credibility and trust.
One of the best ways to find your ICO team members is to attend cryptocurrency or blockchain events. Meetup is a great website to help find events like these in your local area.
How to Market an ICO
You can’t assume that potential investors will want to invest into your ICO. This is where knowing how to create a marketing strategy for an ICO will come in handy.
ICO Marketing Agency
What Does an ICO Marketing Agency do?
Generally to increase token popularity during an ICO, a marketing agency provides services to promote and show the use of the token. This will give potential investors an idea of how the token value could potentially increase as the business progresses.
ICO marketing agencies services include:
- Email marketing
- Search Engine Optimisation (SEO)
- Content Creation
- Cryptocurrency community listings
- ICO calendar listings
- Social media marketing
- Web Design
- *Paid Advertising (Vloggers, Bloggers, Paid Listing and News Sites)
- Press Releases
*Social media and Adwords are no longer the focus of paid advertising. New cryptocurrency advertising bans mean understanding how to advertise an ICO during a crypto ad ban, should be a focus for your ICO’s paid advertising campaign.
ICO Rules and Regulations – Legal Services
Governments from around the world have started to identify the fundraising power an ICO can have for early stage startup projects. The concerning problem attached with this however, is that investors are not fully aware of the risks involved with investing in an ICO.
- An example is that ICO’s avoid the regulatory requirements a traditional IPO has to follow, which means there’s a higher chance of fraud.
Smart Contracts Blockchain
To successfully launch an ICO on a decentralized platform, you will need to create a smart contract.
Define smart contract
Digital self executing contract which is built on a decentralized blockchain.
How Does a Smart Contract Work?
To put it simply, the code in this contract contains a simple “if-then-else” function, This means that a cryptocurrency miner assesses the action of a contract and confirms whether it complies with the contract conditions or not.
If the conditions are met, then the contract function is performed and the block is added to the chain.
How to Write Smart Contracts
A blockchain smart contract example can be seen during the creation of a digital token. This process is explained by Ethereums create your own cryptocurrency guide which explains how to write a smart contract on Ethereum and even generously provides the code needed to do so.
Smart Contract Programming Language
There are various types of programming language for smart contracts and they aren’t much different from regular programming languages like Java or C. One example of a programming language for writing smart contracts is solidity.
What is Solidity?
A smart contract programming language used on a variety of blockchain platforms, most notably Ethereum.
ICO Resources List
Regardless of your geographical location, you can receive ico help from anywhere in the world through cryptocurrency communities on social media or through comprehensive ICO resource lists.