Creating Your ICO: The Bare Necessities

An ICO is only as strong as the business it is for.

Using an ICO can be a great way to raise funding for a project that you are trying to launch. It allows you to tap into a huge market that you would not normally have access to, and it is one of the fastest and easiest ways to raise funding for your project. But what does it take to launch a successful ICO? Let’s have a look at what the necessities for launching an ICO are:

Business Idea

The first part of creating an ICO is to have a business idea. This will be the concept of what your business will do, like building software, providing a service or selling goods. Like all businesses trying to raise capital, whether through investment (Angel or Seed) or through finance (Banks, Personal Loans) your business idea needs to be plausible. Having a business ideal that is related to the blockchain is a bonus, and can lead to better funding, but is not necessary.

A good business idea can get you funding, a great business idea will not only get you funding, but will attract like minded individuals to your ICO, giving you a stronger team to present, hopefully leading to better funding.

Whitepaper

The whitepaper that you create for your ICO is like any other whitepaper you have ever seen, it presents the case of your business, and supplies information and details on the real-world application of the business you are launching. It also presents the proposed value that the token you are creating represents.

Like a business plan in traditional business, your whitepaper is essentially the pitch that you create for potential participants in your ICO. It needs to be well structured, written professionally, and easy for anyone to understand. Unlike a business plan, a whitepaper is available to the public, so you cannot fill it with traditional business jargon. It also cannot be too technical, or should provide detailed explanations of any technical information, ensuring that, regardless of background, the general population can understand what you are trying to do.

IMPORTANT: It is vital for you to present a genuine value proposition in your whitepaper. People who are going to invest in your offering are doing so to make a profit on their investment. Many companies that launch ICOs don’t create a clear-cut value proposition, and this causes the price of their tokens to drop almost immediately after their initial offering ends, as the demand for their tokens dries up towards the end of the ICO.

With a solid value proposition, not only will you drive demand for your ICO early, making it more likely for you to hit your hard cap, but it will continue to drive the demand for your tokens after the ICO finishes.

Brand

The brand you create for your ICO is made up of 3 pieces:

  • Name – Having a name that relates to or accurately describes your business is a really great way to build brand awareness and brand recognition. If you cannot come up with a name that can do this, try to come up with a short and easy to remember name, as this will still create a level of brand recognition.
  • Symbol – The symbol for your ICO will be between 2 and 8 characters, and is used when put in a trade currency pair (e.g. BTC/USD)
  • Logo – Your logo is key to your visual brand recognition. It will be the primary visual tool used to represent your brand. It should be created in such a way that the image of your token is integrated into it.

Having a full brand package that is easy to remember and recognise is important for the long-term success of your ICO. Ensuring that the visual style of your brand is striking and memorable is as important as having a brand name that is recognisable and relatable.

Jurisdiction

Currently the choice of jurisdiction for your ICO is not the most pressing issue you may have, however, the long-term implications of where you register your ICO will play a big role in the on-going operation of your company.

If you are doing your ICO to build a long-term business out of your token, you will need to look for jurisdictions that are ICO friendly or neutral, as they are more likely to introduce legislation that will legitimise your ICO and therefore your company in the long run.

Additionally, the jurisdiction that you choose for your ICO can potentially add to the level of trust investors have in you and would be more comfortable giving you money as an investment. There are countries that are better known for quality ICOs, and those are the jurisdictions you should aim for.

Security

ICOs involve large movements of cryptocurrency from one user’s wallet to another, and unlike other financial transactions, there is no way to reverse a crypto transfer. This makes them a prime target for hackers who look to replace the ICO wallet hash with their own wallet hash. In additional to the fact that these transactions are irreversible, the anonymity offered by using cryptocurrency means that tracking the thieves is far more complicated, as all you may end up with is a wallet hash.

Therefore, you need to ensure that your entire process of giving users your wallet hash is as secure as possible. This includes not only website security, but also means educating users on how and when they should expect communication from you and ensuring that if at anytime they feel something may be remiss, they contact you.

Team

Creating a team for an ICO is tricky business. You will need to have a team that demonstrates 2 different business concepts at the same time. As an ICO is essentially a business inside of a business, your team will need to reflect this. You will need to get experienced advisors who have run ICOs before, but at the same time you will need to get advisors who are considered experts in the vertical that your business will operate in.

Your operational team will also reflect these 2 distinct areas, employing blockchain experts to build your ICO, and an operational team that will run the business. If you choose a business that operates within the blockchain space, you will only need to build one team, as they will serve as both your ICO team and your operational team. The same applies to your advisory board, allowing you to focus on getting advisors who will serve not only your ICO, but your business to.

Budget

These are the core elements that you will need to build your ICO. The piece that will bind all these pieces together will be your budget. Although it is not a necessity for launching an ICO, the more budget you have, the better you ICO will be.

More budget means better teams, which will lead to a better brand and better whitepaper. It also means you can invest in proper business registration, letting you choose the best jurisdiction for registration of your ICO. You can also afford better security, not just standard SSL and encryption, but you can employ ethical hackers to do penetration testing on your site and system to ensure that it is un-hackable.

The last thing that budget is good for is marketing. The more money you have for marketing, the more likely your ICO will succeed. With the right amount of money behind your marketing campaigns, you will be able to get blanket coverage across the ICO sector, bringing in more potential investors.

 

The better each of these pieces are, the more likely you are to have a successful ICO, hitting not just your soft cap, but potentially hitting your hard cap relatively quickly. Out of all these parts, the most important are the idea and the whitepaper. With a strong business idea and a well built whitepaper, you will be able to approach potential investors to provide you seed funding for your ICO, which will lead to you getting a better advisory board, more budget, and therefore, much stronger brand, jurisdiction, operational team and optimal security.

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