The procedure for holding ICO project and the main risks
Companies are looking for any means to finance their project. But now the most popular is ICO, of course. More and more companies want to work with this procedure, but most of them do not even know the main points of it, the main risks and possible losses. Everyone sees only the advantages of blockchain technology, without learning of the essence. Let’s try to answer the main questions that is interesting for companies organize ICO.
What is the main benefit of ICO?
With a competent strategy, the proper presentation of your product and hard work, the company manages to get required amount in 2–3 months. Of course, real terms of implementation can vary significantly, because each team works in its own way and attracts different resources for ICO. And a kind of addition to this advantage is promotion of the project in the media. This happens for a simple reason: people who bought your company’s token and are interested in increasing its value, are trying their best to tell about this and attract more attention to the project by this way.
How is ICO realized?
The whole organization and realization of the ICO project can be included in three stages:
- First of all, the company makes an announcement of the forthcoming ICO of its project.
- Next is the release of an official proposal for the acquisition of company tokens. The company specifies the launch date of the ICO, the duration of the raising, the number of tokens, and many other necessary details. The task of the company during this period, roughly speaking, is the PR of the project, so as large number of people as possible learn about your project and become interested in it.
- The last step is the immediate launch of the ICO. Release tokens and sell them to various crypto investors.
It would seem that ICO process in its essence has a fairly simple structure and transparent implementation. But this is far from the case. In fact, in addition to all of the above, it is necessary to take into account the many legal aspects and risks that ICO brings.
If you structure your ICO in foreign jurisdictions, you need to prepare for launch a number of special documents, one of which is White Paper. This is a marketing document that describes your project, the procedure of your ICO, the provisions for the release and redemption of tokens, information about the team, mentors and partners, if you have them. Reading this document, a potential investor will decide whether to invest in your ICO or not.
White Paper also sets out the main legal aspects. To ensure that your token is not part of the restrictions of the US Securities and Exchange Commission, you need to clearly write the legal component of your project. You can be helped with this by a qualified lawyer or advisors who are well acquainted with these restrictions and the procedure of holding an ICO. That’s why even at the preparation stage you should take care that your team has experienced specialists.
Another risk is the question of reputation. During the ICO, not only the token buyer is at risk, but also those who release it. Never make promises that you will not be able to fulfill. You will protect yourself from reputational risks, carefully delineating the real contractual promises.
A crypto investor must carefully consider each interesting project to erase everything that does not represent a real functioning product. The Ventureon project is just an example of a project that is developing on the basis of a really working fund, Hypercube Ventures. The release and sale of Ventureon tokens will allow the team to develop its project and finance its improvement. The implementation of ICO Ventureon is aimed at financing real startups included in the Hypercube pool. Ventureon has a high potential for development and enables the investor not only to attract good money in the future, but also to help the promising project to get on its feet and work.
In the implementation of the ICO, both the organizers and buyers of tokens need to be on the lookout. Never overestimate your experience and knowledge, because learning new information and additional details will always help you in the future.