Creating your own ICO project
Instruction to create your very own Initial Coin Offering (ICO) project
One of the lesser known ways of crowdfunding in the financial flow of companies and institutions is an Initial Coin Offering, commonly known as an ICO.
However, hearing the term ICO sometimes creates chaos among businessmen.
The reason for controversy and regulatory issues pertaining to ICO’s stems from the use cryptocurrencies for the purpose of raising capital funding.
A newly created ICO sells a percentage of its newly minted tokens to investors interested in purchasing them as an investment opportunity. Usually they are bought with Ethereum or Bitcoins.
ICO’s are entirely different from cryptocurrency mining. Usually mining relies on the computation of mathematical equations and the addition of transactions onto a Blockchain and release the new currency.
Those who want to get involved in mining, use computer programs and special hardware to solve complex algorithms. This requires changing hash rates or high CPU or GPU processing power.
Once these computations are completed, they in turn give a reward amount in bitcoins or in the cryptocurrency that is being mined.
But in an ICO, funds are gathered from direct investments made by interested investors.
It is crucial to to have a look at how an Initial Coin Offering is made.
The process is not simple, yet if you manage to do it, it can be rewarding and can set you up for life, but that’s not the main purpose of ICO’s.
There are several things that you need to follow and consider before setting up an ICO.
Documents needed for setting up an ICO
The common document which every ICO should possess is the “ICO White Paper”. Investors consider validating and sort of build up trust based on this whitepaper, which is a business document essentially.
The whitepaper will contain the following information in detail.
- Market overview;
- Target audience analysis;
- Competitors analysis;
- Problem, which company is trying to solve;
- Project overview with an explanation, how it can solve the underlying problem;
- Technological architecture of the project;
- Roadmap of the project;
- ICO goals;
- Token issuance;
- Token distribution;
- Token usage in the project;
- Team of the project
- Advisors of the project;
- Legal issues.
The above context is not a global structure or standard setup, but more of a common guideline that is being followed as a best practice in creating an ICO whitepaper.
Apart from the white paper, you will need to document financial details as well, which will need to be presented to investors.
Also, according to USA laws, if you plan on gathering money from U.S. investors, it is important to ensure that they can in fact invest in your ICO. Because the SEC recently released new laws pertaining to the acquisition of security assets via ICO’s.
Announcing your desire to pursue an ICO
The next step is to announce your ICO project to the masses.
There are several well known sites on the web that could help you post your ICO.
The setup can be simple if you are tech savvy.
Most tokens are sold to investors in exchange for Ethereu and Bitcoins by means of a smart contract. However, everything is still recorded in its respective Blockchain.
The following are well-known websites that will launch an ICO for you:
Promote your ICO
You want to get as much exposure as you can for your ICO.
First a sort of official announcement will help to give an idea about the nature of the ICO to the public.
This should include the concept behind the ICO and goals that you want to achieve.
The announcement can be made online on social media platforms and cryptocurrency forums. Some of the best places at the moment are Reddit and Bitcoin Talk threads.
Big investors are on the lookout for prospective startups all the time in order to make a profit.
The investors will go through the announcements, and sometimes suggest amendments to the initial business functionality for the startup.
Get Advisors To Help You With The ICO
This will be a proposal to partnership with relevant people or the general public in an attempt to find advisors and assistance.
It is up to the project managers to decide the price of the new cryptocurrency. As these tokens are a digital asset, it is usually evaluated in comparison to other tokens like the Bitcoin.
This will set the price at which your token will be sold to the public during the ICO.
Let the Crypto Community Know That Your Project Is Breathing
The main purpose of an Initial Coin Offering is to raise money quickly for your startup.
It is worth it to acquire the assistance of advertising agencies or professional marketers to keep the public continuously informed. The more the people that are aware the more funds you might gather, this is the main focus of advertising.
The project can phase into the Initial Coin Offering when you have enough potential investors in the lineup ready to invest in your ICO and you feel confident in your product or service.
Selling and Distributing The ICO Tokens
The final step in this somewhat long process is to sell your ICO tokens to investors. It’s up to you and your team to determine prices, bonuses, and pertinent discounts as you may see fit. Following the conclusion of the ICO, your investors must be in full control of their tokens and do with them as they see fit.
The above steps should be taken as a basic guide towards setting up an ICO. Obviously there are many more aspects involved.
An ICO can be a quick way to gather up investments by bringing your own cryptocurrency, project, or service to the table.
A good project targeting the right audience will bring in a lot of investors through an ICO, ultimately allowing the tokens to be used as intended and traded on popular cryptocurrency exchanges.