7 Challenges to Consider When Launching Your ICO
Limit the risks by planning ahead and consider looking at solutions that can help you throughout the process
Whether you’re new to start-ups or a seasoned hand, there’s a lot to consider before you launch an initial coin offering.
From behind-the-scenes project goals and product development to customer-facing support and marketing, you need a solid plan in place that includes contingencies. Research and preparation goes a long way to help you overcome these common ICO challenges.
Challenge #1: Is an ICO the best way for you to raise funds?
Before you begin down the road of seeking funding via an ICO, consider whether blockchain technology is the best fit for your project, and whether an ICO will be more useful to your project than traditional methods of fundraising, such as seed funding.
This can be a difficult consideration. Not everyone knows how to use a cryptocurrency wallet, there are a lot of projects seeking contributions out there, and competition is fierce. You need to have the right project, right team, and right plan in place for your ICO to be successful.
Challenge #2: How will you implement your token?
In addition to your business and marketing plan, you need a solid token plan in place.
This includes the economics of your token such as the number of tokens and plans for distribution, as well as the characteristics of your token (e.g. is it a security or utility?) and its function within your platform, product or service.
Other important token considerations include:
- What date will the tokens be generated?
- Do you have a maximum cap on tokens?
- How many tokens will your team receive? How much of this will be spent in-house e.g. to fund product development, marketing, legal and administrative costs?
- Will early contributors receive incentives?
- Will there be a refund program if the ICO fails?
Challenge #3: Are you ready to answer a lot of questions?
Cryptocurrency is still a new field and most contributors are committed to doing their own due diligence before purchasing a new token. That means you need to be willing to answer questions about your project, your token and the roadmap for the future. Providing support and exceptional customer service will go a long way to ease this challenge.
Challenge #4: Is your project ready for scrutiny?
Potential contributors will want to look under the hood of your project. One of the best ways to prepare is to make sure that your development team has produced a proof of concept or an early release version of your software.
Creating a tangible product shows promise for long-term value, and in this way, you are more likely to create traction and encourage people to explore your token offering more seriously.
Challenge #5: How will you stand out from other ICOs?
You need a solid product, professional brand, community buzz and responsive team to really make an impact in what is currently a crowded market.
Marketing should not be overlooked. This may mean expanding your team or hiring an outside agency to help with web development, public relations, social media management and other marketing services deemed necessary to fill for your given project. Don’t forget to build your customer support team or train your team to field enquiries appropriately.
You will also need to develop a technical white paper that goes beyond “marketing fluff” to clearly establish project goals, provide a market analysis, a technical overview, token details and information on the team.
Challenge #6: Are you operating within the regulatory framework?
Given the ambiguity in legislation in some jurisdictions and the continual updates to regulations governing ICOs, you will need to ensure you have professional legal advice before going ahead with your ICO.
A number of countries, such as China and South Korea, have banned ICOs outright, while others such as Australia, Switzerland and Malta have enacted progressive regulations permitting cryptocurrency-based fundraising.
It is important to ensure you are playing by the rules and regulations within your jurisdiction to avoid getting tied up in legal problems during or after your ICO.
Challenge #7: Have you implemented safeguards against hackers?
One of the biggest challenges for companies looking at launching an ICO is the threat of hacks. It’s essential to have a smart contract in place to avoid transaction errors and ensure the safety of your tokens and the transfer of cryptocurrency to your contributors.
Limit the risks of your ICO by planning for these challenges and consider looking at solutions that help you with the ICO process. Visit LaunchWithRocket.com for more information on Rocket, Etherparty’s all-in-one, end-to-end solution for crypto-crowdfunding. Stay plugged in to exclusive content, updates, and announcements by signing up for our company newsletter, and by following us on Telegram.
