In the corporate world, startups are like the infants who spend their initial time span in collecting resources. Are you also thinking to initiate a startup? If yes, then you might be interested in the term fundraising. The term fundraising is basically a concept where companies lure some powerful persons or organizations with financial prowess.
We are not going to discuss the techniques of fundraising here in this post. I have something else which more lucrative for your business. Yes, I want to talk about the ICO aka Initial Coin Offering organizations.
In the new digitized world, digital currency is the new asset that can drive your business to new heights. ICO organizations will provide you with the pathway from where you can easily acquire these assets for your business.
Let’s talk in detail below so that you can know how you can leverage the ICO for acquiring fundraising for your startup.
Cryptocurrency investment – value investing
Sure, it is not an easy task for a blockchain enthusiast to explain someone with just $500 that when they are investing in any cryptocurrency, they are investing in an idea. Once a blockchain project succeeds, it attracts more users, which increases demand and higher demand translates into higher token prices. That is economics 101. However, ICO investors (if I may call them investors) nowadays, are driven by the hype, they want to invest $500 to become a millionaire the next day. If a token, does not “moon” within a few weeks, they call that token a failure.
On the contrary, experienced visionaries have double agenda while investing or supporting any ICO. Preliminary, they would try to understand the problem that a given blockchain startup is addressing. If the problem is valid, the next point is an application. Does the given project have a sound application in mind or just using a ton of “fluff” in their white paper? Once they feel satisfied, they would then be investing.
Unrealistic tokens may succeed on a short-run as well. However when they are due to perform they are destined to fail.
A New Way to Get Funding
An ICO is a type of crowdsale. In an ICO, the startup creates digital tokens that it sells to participants in a crowdsale, usually in exchange for a cryptocurrency like Zuflo or Bitcoin. Once the startup hits its fundraising goal, the tokens are automatically distributed to the participants in the sale. If the company doesn’t hit its goal, however, the participants receive their funds back.
a) Ensuring Utility
The purpose of the new token varies for every startup that runs an ICO. However, the token should have some utility within the new company. This means that the crowdsale participant will be able to use the token in the future to buy products, gain access to features, or otherwise transact with the startup. The new tokens are not shares. Crowdsale participants don’t receive equity in the new company.
ICOs run on the blockchain. They use blockchain technology to secure the digital tokens, preventing forgery and double spending. While still relatively new, ICOs have become wildly popular. In 2017, ICOs generated more funding for startups than early and seed venture capital. Startups have earned hundreds of millions of dollars in a matter of hours through ICOs.
b) Exchanging Tokens
After the ICO, most companies choose to list their newly created tokens on any number of cryptocurrency exchanges. This allows more people to buy and trade the token, creating a demand for the product you’re building.
If your ICO included a reserve of tokens set aside for development, listing your token on exchanges could make your token more valuable, increasing the value of your development fund.
Communication is the key
No two companies or investors are the same, and an ICO is no exception. This is what makes effective communication just as important as your marketing strategy.
The way you communicate with investors is essential to your success. Have you outlined the details of your ICO, such as the technical information that investors are sure to mull over before making a final decision? How about your vision for the future, including where you see your company moving to in the next year?
A clear marketing message puts you in a good light with investors. They want to see a clearly defined company strategy, and possibly a serious lock-up on token bonus for the founders, to create the sense that the company is in it for the long haul. Alternately, a cloudy message can lead to your business (and ICO) being overlooked, in favour of the (heavy) competition.
So, ICO has a huge scope for growth in the coming future. Just like the stock market it has the potential to decide the inclination of the market.
So, are you looking for ICO services? Zuflo coins can be your best bet as bitcoins are in a brink of downfall these days. Leave a comment and let me know your thoughts on this. Adios for now…