Client Evaluation Methodology
The LGO public sale was a tremendous success, fulfilling its hard cap in just a few hours. What happened next was truly unexpected — we did not stop receiving inquiries from different entrepreneurs involved in the blockchain space from all around the world seeking our advice and consultation for their very own token campaigns.
We were delighted to guide these teams in reaching their goals because we are contributing to the advancement of this new technology as a whole. However, we are very aware that some of these projects are scams out to defraud token holders; therefore, it is vital that we exercise extreme caution and remain vigilant for any red flags.
While the initial plan was to have our founders serve as advisors to some of the most promising projects that have approached us, we eventually realized that we needed to establish a mutually beneficial framework for these services.
During the LGO token campaign, we built one of the strongest global communities and connected with many influencers, investors and innovators. We had built a global team of regional ambassadors, who were now hungry for their next challenge. Therefore, the best course of action was to create an agency of LGO Group dedicated to providing enterprise-grade token generation services — we are LGO Launch.
What do we look for in our potential clients?
Since the projects we support will be directly associated with the LGO Brand, it is important that we remain careful during our selection process as well as receive constructive feedback from every member of the LGO family before making any final decisions.
In order to standardize this process and establish a baseline framework, we have defined a set of guidelines that will govern our decision making during the selection process, which is composed of three components: Project Team, Value Proposition, and Business Plan.
A strong, multifaceted team is key in winning over a potential investor’s trust. When venture capitalists are hearing out pitches or evaluating proof of concepts, it is not uncommon for them to follow up with specific questions targeted towards the founders to give insight into their backgrounds, knowledge of the industry and ability to perform under pressure.
Essentially, they are evaluating the leadership.
Strong leadership is essential to the long-term success of any business, especially for startups that are involved in an emerging space such as blockchain technology.
A large part of why LGO Group’s ICO was so successful is because participants were able to believe in the strong team behind the project, who are fully dedicated to delivering a world-class institutional trading platform and contributing to the advancement of the industry as a whole.
Our process involves meeting with the project team and discussing the fundamental details of their project. Their initial pitch is key in determining the legitimacy of their intentions as well as their ability to educate others of their concept.
- Do they seem enthusiastic and well-versed on the topic at hand?
- How do they generally feel about the future implementations and scalability of blockchain technology?
Communications both internally and externally are key success factors of a closely-knit team. Agile communication frameworks and transparency amongst the team not only ensures a fluid and cohesive means of collaborating but also gives us a preview of what could be expected when working with them moving forward.
- How are they interacting with one another? Are they all on the same page?
- How has their level of responsiveness been like when we contacted them?
Experience within the team is essential for getting investors to listen and is very useful during times of pivotal decision making when options need to be quickly evaluated. An ideal team should be composed of strong developers — capable of handling the project’s technical requirements; business development experts — for making important decisions, forming partnerships and establishing an effective business strategy; and industry professionals — with a deep understanding of the target market.
While blockchain technology has the potential to spark innovation across many different industries and processes, it is important to realize that not every project is meant to use blockchain. Startups occasionally use words like blockchain and artificial intelligence as trigger words to grab attention and make their project seem better than the competition. Therefore, it is important that we identify and thoroughly analyze our client’s value proposition.
- Why is implementing blockchain technology within this industry an advantage over traditional methods? What is their competitive advantage?
- What is the token’s utility within the ecosystem? How is the token implemented in their project?
- How difficult would it be to incentivize adoption of their token within their target market?
A token’s use case is very important in determining the growth and long term success of the project. While we may encounter projects with a strong value proposition, their token’s utility is unclear and/or unfitting.
Overall, the token should address an area of need within a market where it can provide an innovative and unique solution to a clearly identifiable problem.
In some cases, the tokens may not have a utility at all — functioning as asset-backed security tokens. This is an emerging concept within the industry, and in order for us to provide our services for these types of projects, we must maintain regulatory compliance by treating security tokens as securities, as stated by the SEC in their investigation of the DAO:
“Whether or not a particular transaction involves the offer and sale of a security — regardless of the terminology used — will depend on the facts and circumstances, including the economic realities of the transaction. Those who offer and sell securities in the United States must comply with the federal securities laws, including the requirement to register with the Commission or to qualify for an exemption from the registration requirements of the federal securities laws.”
While more technical-oriented critics would solely assess a project’s scalability based on its blockchain infrastructure, we find that it’s very important to identify the scalability factors of its business structure by identifying specific processes that do not perform well at scale.
Coming up with an innovative concept is one thing, but transforming that vision into a successful business is an entirely different challenge. Investors need to see a well-structured business plan outlining the business’ long-term strategy. This enables investors to better understand the team’s vision behind the project and how they plan to execute on their promises.
- How do they intend to roll out their product after the token sale is complete?
Scalability of the project consists of both technical and business components. From a business perspective, a project should plan ahead by implementing processes that prevent or minimize issues that may arise from rapid growth and unforeseen spikes in user adoption.
Project roadmaps and deadlines should be supplemented with case studies and market analyses to support a clear understanding of their domain. This includes identifying their target market, measuring the addressable market size, establishing a competitive advantage and reaching conclusions based on an objective and unbiased analysis.
- How will consumers in this market react to this new structure?
- How quickly can the solution be implemented?
- What types of regulations must be addressed?
- How will the team behind the project generate revenue?
- Which processes experience reduced efficiency as a result of a rise in user adoption?
Strategic partnerships can help further a project’s exposure and credibility. These partnerships are either established with firms that help improve their product or those that are willing to become prospective users and potential adopters at a time when the product, technology or service has not yet launched to market. Early adopters methodically test out the product or service through a series of isolated use-cases until a desirable state of maturity has been reached.
Advisors serve as the intellectual backbone for a team to make smarter decisions and improve their chances of success. They often bring years of experience, connections, and a strong understanding of the project’s domain and target market to the table. Their strategic guidance in implementing emerging technologies across various markets can make a notable impact on the teams’ success.
Although we do support clients that are at their ideation stages, the vast majority of inquiries we have received thus far are projects that at the very least have assembled a team, drafted a white paper, and established an online presence of some sort.
In essence, we approach our potential clients the very same way in which investors would approach them. We ask the same questions that potential investors would ask, and evaluate their responses using similar methods. If we’re convinced, then we have no doubt that investors would surely be interested in this opportunity.
We take pride in our ability to work with cutting-edge and innovative projects that aim to disrupt entire ecosystems. It is of vital importance, however, that we never associate ourselves with fraudulent or potentially malicious projects that could damage our brand’s reputation.
Once we have selected a client, we will share a report with the community that analyzes them against the criteria identified in this article. We are excited to onboard new clients and share this information with the community in the near future!
About LGO Launch
LGO Launch is a subsidiary of LGO Group, whose mission is to build confidence in all stages of a crypto-asset’s life: from creation to sale, promotion, acquisition, storage and use.
LGO Launch provides a comprehensive set of token generation services for a variety of clients. Our cutting-edge services are based off of a content creation, diffusion, and traction approach — ranging from strategy and technical support to international marketing and outreach.