Understanding various steps to conduct an Initial Coin Offering successfully.
A few decades ago, the internet was the revolution, that brought the humans closer to each other. All the information across the world was made available on the fingertips of each and every individual, gradually the network gained momentum and now the internet is the biggest network of computers and servers around the globe. After Internet, came Bitcoin and through Bitcoin came Initial Coin Offering.
The Internet is the one where a copy of the data is sent to the client requesting it, but with the invention of cryptocurrencies using the Blockchain Technology, the transfer of information was made possible by avoiding keeping copies of it in different places. In other words, an asset on the Blockchain network would be available at only one location at a particular instant of time. Hence it was based on, not sharing, but ‘transfer of value.’ Bitcoin was popularly known to have been solved the double spent problem which existed in cryptocurrencies prior to Bitcoin, but with the Blockchain Technology and its spectacular features, people couldn’t stop praising and embracing it.
Initial Coin Offering assisting Entrepreneurs
In order to start a particular business, an entrepreneur requires huge amounts of investments depending upon his project. Earlier it was difficult, as the entrepreneur had access only to a limited number of Venture capitalists and investors in his vicinity. But the cryptocurrencies and Blockchain Technology spawned a new way of public crowdfunding known as Initial Coin Offering through which the investors and venture capitalist from all around the world gained access to participate in the offering provided by the project.
It is well known that the Initial Coin Offerings are highly beneficial, as they digitize the complete process and reaches to every investor in the nook and corner of the world as it is online. Depending upon the popularity as well as the potential of the project, it is evident that one has been able to raise almost millions of dollars within a few days of the Offering, which was highly challenging for the Initial Public Offering.
The Initial Coin Offering Process is as explained below.
1. Having a clear Idea or intention behind the project is the first and the foremost prerequisite for the Initial Coin Offering. One must be very crystal with respect to his project and its implications in the real world. One must be able to differentiate themselves from other similar ongoing projects in the market so the users understand why the project must be supported.
2. After having a clear idea for the reason of existence of a project the entrepreneur’s next step is to create an effective team consisting of developers with a lot of technical knowledge to develop the product, business professionals in order to assist in the marketing and for the development of business model for the product along with the barristers to provide the project with legal assistance with respect to the regulations from the government.
3. Once the entrepreneur is done with the above-mentioned steps, he must have a clear vision of what Blockchain must be applied for his particular project so as to make it as efficient as possible. The structure of the public sale, the number of tokens, along with the time frame for the ICO must be ready at this stage.
4. Development of a user-friendly and technically apt White paper is the next step. The entrepreneur is needed to author a Whitepaper which explains the project in an easy and an effective way for the investors. This is one of the crucial steps, as the White paper is the official document that contains all the legal terms and conditions of the Initial Coin Offering along with the project’s detailed information. The entrepreneur must be able to resonant the project into the investor’s minds for a successful Initial Coin Offering through this.
5. Before making the project open to the public, it is well advised that the entrepreneur reveal it to the industry insiders and some of the close investors so as to get feedback from them and give a facelift to the project. The Entrepreneur might not be able to identify some of the key inherent flaws in his project. Doing this would surely be helpful to him. This group of people might further act as a word of mouth to propagate the project further.
6. A pre-sale can be conducted by raising a limited capital prior to the original Offering. This might help in funding for the developmental as well as legal procedures required to set up the complete ICO. This is, however, is optional.
7. A selected suite of investors can then be targeted to market the project through numerous social media tools. The project members can also initiate a discussion on various Bitcoin forums about the application of the project.
8. Finally, the Initial Coin Offering is conducted on the stipulated date. It might also be offered in different phases for a prolonged duration of time to obtain funds consistently.