A guide for entrepreneurs planning to raise cryptocurrency to fund their project.
If you have a blockchain startup idea, you will obviously need funding to put it into practice.
There are various ways of raising funds from the market. This document will explain in detail how to organise alternative investment through an ICO.
So far, there is no single established definition of what a "token" is. Depending on the jurisdiction of individual states, it can be treated as a security, "digital commodity" or "digital property", a licence, a property right, or a new type of asset.
The token records the right to demand the receipt of a product or service from the issuer. They can also include discount tokens and intellectual property rights tokens.
Token acts as an internal means of payment within the developed blockchain-based platform or app.
Token that gives its holder the right to vote in the management of the company and profit from economic activities.
Token that records the issuer's obligation for buyback in a certain time with a markup to the nominal value.
Answer the following questions to make sure you really need a blockchain solution and an ICO:
After you figure out how the ICO works and which model suits you best, you can proceed to technical matters and issues of project presentation.
This is the most valuable group and makes up the core of your audience. They are evangelists for your project who believe in it and its importance. They will form the initial community for your product by not only investing in it but also actively promoting it within the crypto community.
The former will enter the campaign on its first day and hold a token for a long time, betting on its future growth. The latter will try to buy a token with the largest discount and sell it immediately at the first price rise once it is listed on an exchange.
These carefully analyse projects and invest only in the most promising ones. They can significantly increase project capitalisation in a short time and ensure the success of the ICO. It is important to maintain a balance between the share of funds and individual investors, in order to further ensure token liquidity on exchanges.
Serial сryptoinvestors usually invest in a variety of ICO projects, making bets like in a casino, in order to diversify their investment portfolio and fully allocate their available cryptocurrency.
Waves is a decentralised blockchain platform that offers an interface for any ICO project to release its own asset tokens in just a few clicks.
After the token is issued on Waves, the asset automatically becomes available to buy and sell on the decentralised exchange (DEX), which operates in the Waves online client. The ICO project tokens are traded on DEX in pairs with other cryptocurrencies – for example, against WAVES, BTC or ETH.
You can list tokens on other exchanges after the asset is issued on Waves – for example, on Tidex or Binance. The procedure for asset approval varies across marketplaces. Exchanges require the following basic data: full and abbreviated token name, lowest fee, developerment language, type of the platform’s blockchain consensus, link to the ICO project page on Bitcointalk, link to the GitHub profile, etc.
The ICO process can be divided into several consecutive and interrelated stages: Preparation, ICO, and Post-ICO.
An ICO starts with careful project preparation and presentation. All further marketing and PR activities to attract investors will be useless without this.
You will need to develop and integrate a personal account for investors to enable ICO participants to deposit cryptocurrency funds directly from the project's website. The personal account is an interface built into the ICO project website that allows investors to easily deposit funds in the course of the crowdsale, as well as to track the token balance in their account.
This covers the main stages of fundraising, which involve all your different channels and tools for attracting investors
The stage immediately preceding the main tokensale can take two forms: preparation for the ICO or a ‘Pre-ICO’. The sequence of actions on the part of the organisers is similar. The main difference between a Pre-ICO and the main ICO is that projects arrange Pre-ICOs in order to test out investor interest in their project and the demand for tokens. To do this, the company sells a limited number of tokens – a small part of the assets compared to the main ICO.
The project will typically offer a discount for the purchase of tokens during the first days of the crowdsale, to attract investors to actively participate in the ICO early on.
It is important to secure the support of large investors at the pre-sale stage, as this will signal to the entire crypto community that the project is promising and is worth participating in.
The tokens are often sold to large investors during a presale.
The pre-sale is an offer to large investors to reserve some of the tokens in advance. The ICO project plans in advance what share of the total number of tokens it is prepared to offer during the pre-sale. Organisers motivate early investors with substantial discounts, but at the same time they limit the pre-sale to a minimum amount of capital investment.
It is impossible to establish a high-quality relationship with a key audience for the project – blockchain enthusiasts, traders, investors, etc – without this activity. Administration of a thread on BitcoinTalk provides direct interaction with the target audience, enables you to answer questions, dispel doubts, and introduce your audience to the developers. Announcement of the campaign on Bitcointalk is a ‘must-have’ part of the program. You will receive many reviews – not all of them will be positive, but they will help you to improve your project.
Slack and Telegram chats are some of the most important channels for communication with the community, as users can communicate with the project founders, team members and with each other there. These channels must be monitored on a regular basis and all the questions raised by users must be answered in good time, dispelling any unfounded doubt or accusations.
A decent ICO campaign requires comprehensive administration of social networks and timely coverage of all news, appearances in mass media and detailed campaign information in all the accounts. Using Medium, you should operate a blog for the project, tell people about the project, ICO terms and conditions, the market and the prospects of your project. The Medium blogging platform is also a good place to post your FAQ.
This activity enables you to motivate crypto community members to carry out various promotional activities for your project in exchange for a reward in tokens. A Bounty may include a Signature campaign on bitcointalk, administration of language branches on bitcointalk, social bounties, bounties for email subscriptions, as well as a bounty for blog and media publications.
An ICO tracker is a website which lists current, future and past ICOs with all the relevant project data and enables users to subscribe to alerts about the launch of a specific ICO.
It is important for the ICO campaign to be covered in the media as much as possible. The most tangible PR effect is obtained from building long-term relationships with reporters. In this case, the launch of your PR campaign should be scheduled at least 3 months before the launch of the ICO. In a context of tight deadlines for ICO preparation (less than two months), it makes sense to cooperate with the mass media on commercial terms. The key PR instruments for ICO support are the following: press releases and post-event releases, publications in the media, speeches on the radio and TV, PR events, copywriting of information materials. Preliminary preparation of speakers for efficient communication with reporters is arranged, if necessary.
Participation by the project founders in strategic events – conferences, meetups, hackathons, including foreign ones – ensures additional strong PR for the project. Repeated presentation of the project before the most important audiences and consistent networking will contribute to the greater support for the ICO project.
It's important to set up a Google Analytics counter to track conversions, volumes and sources of investment. This will allow you to optimise advertising campaigns as they are running.
It should be remembered that as the number of ICO campaigns grows, the cost of paid traffic will also grow. A balanced distribution of your advertising budget across various traffic channels will allow you to keep costs manageable.
The key to a successful ICO is its focus to the global investor market. Therefore, it is necessary to involve international partners from local markets – active users and crypto enthusiasts who have access to an audience of their compatriots.
Work on the project does not stop after the ICO ends, having raised the required amount of investment. People who have believed in the project and invested their funds in it will carefully monitor its development in the expectation that the plans announced by the developers will be successfully implemented and that issued tokens won’t lose their value.
The following activities should follow ICO completion:
Upon crowdsale completion, the issued tokens are distributed among investors in accordance with the amount of their investments in cryptocurrency accepted by the project. If the tokens are issued on the Waves platform, the purchased tokens will be transferred to the Waves e-wallet.
It is important not only to raise the required amount of investment in your project, but also to maintain constant feedback with all investors who have believed in your idea and invested their money. Prompt communication and interaction with the audience will support belief in the project and minimise the risks of negativity and, as a consequence, the risk of token depreciation.
To boost token value on the secondary market, it is important to provide as much information as possible to the community, indicating ongoing development of your project. PRs on various relevant websites give a positive reputational effect, and the public is more willing to purchase issued tokens due to their growth against the backdrop of positive PR support.
The value growth of the ICO project tokens, inter alia, is enhanced by their liquidity, which is ensured by listing on as many online exchanges as possible. It is important to list tokens on new trading platforms to boost their popularity and capitalisation.
It must be said that an ICO requires significant labour and time efforts. The project team must be competent in a wide range of marketing and advertising fields. This ensures synergy.
The mastermind behind the project should pay special attention to their own social activities, because it is important that the community can see their real participation in the progress of the project and interest in its success at all stages.
Decide on the duration of the ICO and discounts for the first investors. Do not stretch out the time – one month is more than enough. If you need to raise a certain amount of money, it can happen much faster – the ICO will be completed once you have reached your goal. Some projects achieve their goals in only 15 minutes.
Stay positive – you work with people and for people. Meet the demands of the community, and try to take all their proposals into consideration. Don’t forget that in the case of a successful ICO you may have several thousand investors, and all of them will express their opinions and ask questions. Never lose your temper. If you do not like communicating with people, an ICO is not for you.
Conduct a global international ICO campaign, because local campaigns are usually not that successful.
An Airdrop is the distribution of a small part of the project's tokens among crypto community members. The airdrop is distributed for free or as a reward for some simple actions – for example, for registering a personal account, following you on social networks and chats, providing a Waves wallet address in the account, etc. (Don’t confuse this with a bounty: the conditions for obtaining tokens from an airdrop should be as simple as possible).
This activity allows the company planning to run an ICO to test interest in the token among the community of potential users (primarily among Waves holders), receive community feedback, and to conduct initial marketing with minimal costs. Besides this, airdrop distribution contributes to the establishment of an ‘early adopter’ community.
You will need to do the following in order to issue tokens for Airdrop distribution:
abbreviation of the future token
description of the project and the token model
volume of the test issue of tokens (1% of total planned issue)
this checkbox should be ticked, because you will issue the remaining tokens in due course.
After the test number of tokens is issued, they can be distributed among the crypto community – for example, among Waves Community Token (WCT) holders, in proportion to their balances.
Waves Lab is a startup incubator for developers creating breakthrough solutions for the problems of the modern world using the Waves platform infrastructure. The main goal of the incubator is to support such projects and develop the Waves ecosystem.
To apply for participation in the Waves Lab, the candidate will need to fill out an application form.