Funding in ICOs is big business. By the end of 2017, the market was positively thriving, with capitalization soaring to stratospheric levels. Those newer to the cryptocurrency landscape might think it easy to engage investors and secure funding by throwing out a few buzzwords and bigging up the blockchain, but this is far from the fact.
When it comes to cryptocurrency and the tech sector in general, everyone wants to be as enterprising as possible. Some want to be the one to introduce something wholly original and innovative to the masses, while others want to turn tried and tested tradition on its head with a distinctly different approach.
In this constantly moving and reshaping industry, there’s a certain breed of investor who thinks little of throwing cash at a threadbare idea for fear of missing out on an opportunity. These investors, the type that demand little in the way of information and demonstrate few industry insights, are easy pickings for tech entrepreneurs looking to fund projects with little in the way of a product in place. Some think the same applies to the cryptographic sphere as well, but the reality might surprise you.
Getting a successful ICO off the ground and rolling can be a challenging undertaking. There’s much more besides basic funding to consider, with a plethora of plates that need to be spun simulataneously for things to hit project milestones and ultimately, secure a successful return. Many ICOs fall flat, either at the first hurdle, or later on after endless struggle. Even ones that don’t outright implode aren’t unscathed.
Project teams can pull away from the effort, leaving key areas unattended to, while communitites that might have built up around an ICO begin to grow ever smaller before falling off the radar altogether. Some refer to this type of result as a semi-failed venture, although that might still be putting it mildly. The truth is, the rate of failure for ICOs is considerable, with almost six in every ten ICOs crashing and burning. When things start falling apart, investors can get very nervous indeed. Funding that was once regular and generous might reduce to a trickle. This makes for an even grimmer outlook for an ICO on the wane.
One of the reasons why so many ICO projects struggle in the current climate is that individuals are altogether more engaged with the sector and have access to relevant resources and education on the topic. The average individual will spend time researching a prospective ICO project, meticulously studying white papers and carrying out in-depth searches into all key personnel involved.
The wider crypto community also allows for easy information sharing, ensuring the average individual receives the essential facts about any given ICO, while also being advised of any scamming risk. Speaking of, the role of regulators has become more focused recently, with active prosecution sought when scammers are identified. This level of scrutiny demonstrates a growing savviness with those looking to engage with ICOs, but it does come at a detriment to overall ICO projects looking to succeed.
However, there are indeed those that succeed. But once the tech has been sold, a product exists and a team of passionate professionals are collaborating on an ongoing ICO, a whole new heap of hurdles await.
Don’t think garish imagery and over-the-top website design is going to win you hearts and minds. First and foremost, you’ll want a technically sufficient website. Once you’ve got the basics in place for a smooth-running site, take some time to ensure the design hits all the right notes. Making the right sort of impression to a potential investor is all about presenting yourself professionally. Dynamic elements are all well and good, but the content needs to be relevant and on-point. Make sure everything your investors need is accessible to them, while the site itself is as inviting and user-friendly as possible.
When it comes to promoting your ICO, a stellar white paper is a must. You’ll not only need to keep it professional, you’ll want a user-friendly structure that’s easy to digest for your investors. You’ll want to include some standard staples like a roadmap that you intend to stick to, while a more in-depth business strategy outline is also a must. It goes without saying, but you must ensure that this document is as pitch-perfect as possible. Spelling and grammatical errors, formatting issues and similar issues will only send investors running for the door.
One thing you should certainly be asking yourself is whether or not an ICO something that you should be embarking upon. What’s so innovative about your application? What infrastructure do you have in place? Can you identify a need in the market for your product, call up a list of competitors and success stories? If your business case struggles to justify a new token being created, it’s a clear sign an ICO approach may not be for you.
Creating a cryptocurrency involves some serious software and a considerable coding requirement. Version after version need to be developed and tested, while ensuring a secure platform is another huge consideration. If, after everything’s been formulated, you’re noticing a distinct lack of engagement by miners and coders, don’t expect investors to be any more enthusiastic.
It’s important that your project hits the ground running, with as many people in the crypto community talking about it as possible. Even before the ICO is available, hype should already be being generated to ensure it remains a key topic of conversation within the community. In fact, when the crypto sphere is engaged to enough of a degree, some projects can actually hit their financial targets during the PRE-ICO stage.
Don’t neglect the importance of solid branding, whether that’s hitting upon a memorable name for your coin, rolling out some eye-catching artwork and logos, or tethering a terrific tagline onto your project. In the current era, many people seem to underestimate the importance of marketing and necessary funding is often sidelined. Additionally, many make the mistake of thinking a successful marketing campaign is easily attainable by using in-house resources and dedicating minimal time to the endeavour. Mistaking the crucial role of marketing can be a nail in the coffin of an ICO, so ensure you give it the due care, attention and funding it rightly deserves.
The reputation of project personnel can be a deciding factor for some investors. Those looking to invest want to do so with projects that boast professionals with relatable experience and a proven track record of success. There’s no point bringing second-rate staff into the equation if you’re looking to net investment on a significant scale. Even if you do have premier personnel working with you, make sure all key roles are reflected online, with up-to-date profiles at all the relevant platforms. If an investor struggles to find a slither of information on you and your team, alarm bells start ringing.
Many might look to cryptocurrency and pray for price rises, hoping to cash in and spend big returns on enjoying a life of luxury. It’s understandable, if a little naive. Those serious about profiting big in the long term are altering their approach. Rather than dive in for discounts and grab for bonuses, some sensible ICO investors instead sit back patiently, waiting to see if they will become listed on an exchange.
Additionally, with a downturn in the startup market it’s easy for ICOs to be valued over the odds. This makes the whole venture more of a risk. If you’re genuinely looking to steer your ICO project to success, a well-honed strategy and methodical approach, avoiding all of the common mistakes outlined above is a must.