When some mind-blowing project ideas do not get enough funds, they get stuck. If you do not want the same to happen with you and your project, then ICO (Initial Coin Offering) is for you.
Earlier, businesses used traditional crowdfunding platforms that were recognized as the things of the past. However, emerging technology invented new ways to generate funds for businesses. ICO is one such invention that enables sellers to sell digital assets to raise funds. An initial coin offering (ICO) is the latest method to raise money for a blockchain-based project. It is the most popular fundraising platform for growing your business.
Fundraising activities are attractive options for entrepreneurs or startups to grow their businesses or projects. If you know the phenomenon, you can do crowdfunding on your own or hire an ICO development services provider to help you.
Scroll down to know more about ICOs.
Types of Initial coin offerings
- Private ICO – In this type of ICO, only a few investors can participate in fundraising. This includes only approved net-worth personalities or financial institutions.
- Public ICO – In Public ICO, the general public can participate, and almost anyone can invest. However, regulation concerns make public ICOs less popular than private ones.
Advantages of ICO
- High ROI – ICO platforms generate high ROI as investors from all over the world can participate. ICO offers a unique way of funding, maintains regulation, and incorporates various success factors; all these bring the advantages of ICO into the limelight, attracting a huge customer base and thus, higher ROI.
- High Liquidity – The high liquidity offered by ICOs enhances the fame of ICOs worldwide. Investors get attracted to the mechanism which enables them to develop a secondary market for their investments.
- Fast Capital Raising – The platform has the capability of fast funding. Through ICO, the complicated financing process is removed, which assists in enhancing the speed of capital raising. To contribute to the fast financing, some other factors responsible are- virtuality, globalization, and regulation.
- Minimization of Capital Raising Costs – The main reason behind the reduction of funding costs is the elimination of financial intermediaries. These blockchain-based solutions do not require much marketing or advertising cost and also no need for intermediary; these assist in the reduction of capital raising costs overall.
- High Availability – If we compare ICO with other financing platforms, then it is found that ICO does not require many legal and financial requirements to raise funds. This is due to their Virtuality and low level of regulation.
Working of the ICO Fundraising
It might have been clearer that ICOs (Initial Coin Offering) require deep-rooted knowledge of technology, law, and finance. The basic functionality of ICO is to raise capital through decentralized blockchain technology. When investors buy some of your ICO assets, they get some of your services.
Let’s go through the token creation process of the ICO system below:
- Aware the Investors – The main goal of an Initial Coin Offering (ICO) is to tell potential investors about your business or project. Without this, investors won’t be able to make up their minds on developing the ICO platform. Here, you need to know your customer, competitors, features to include, etc.
- Token Creation – The next important step is to create tokens that represent assets in the blockchain. These minted tokens can be changed and traded. Some of you might get confused with tokens and cryptocurrencies, but both are different. Tokens are considered as modifications of cryptos that are built and run on a network of blockchains.
- Promotion – The successful building process of tokens is followed by a well-planned promotion campaign to attract a huge customer base. This campaign involves the marketing of the platform through various forms like content marketing, Discord, telegram, PR, social media, Influencer, video ads, email marketing, etc.
- Initial Coin Offering For Investors – After the above steps are finished, the tokens are offered to the investors and they buy them. When the needed money is raised, it’s a good sign that the ICO launch went well.
What does an ICO Development Company do for you?
If you have decided to develop an ICO fundraising platform to fund your business, then choose any experienced launchpad development company to launch an ICO. Any development firm will follow some basic steps.
- Analyze the Requirements – This is the most crucial step as everything needs to be considered here. After getting the project’s requirements, the team will make sure the project is viable and possible. A lot of research is carried out to determine what the market needs and develop a robust Roadmap.
- Drafting A White Paper – Following the roadmap, a white paper is written. It is a detailed document that includes everything you need to know about a project. The information scripted is unique, simple, short, and easy to understand; to give a clear picture of what the project is all about to investors. A white paper may include Project’s technical part, Token details (including a description), and the token’s Prospects.
- Development – The development begins post-whitepaper creation. The designers design the website that may appear alluring to investors by keeping in mind that the user interface and user experience (UI/UX) should be interesting and attractive to watch. The development team commences with the front-end part and develops some parts of the platform.
- ICO Marketing – You might be thinking about how marketing could be done before smart contracts development, but this is the strategy that most ICO development companies apply. Actually, promoting the project prior is a good idea to attract investors. It is very important to examine that the company is implementing the ICO marketing strategies that get results.
- Smart Contracts – Smart contracts act as the heart of ICO because all the transactions in the platform are carried out through them. Developers create lines of coding to ease the transaction process and ensure security.
- Wallet Integration – An ICO requires a wallet to store, send, and receive digital currency. With features like support for more than one currency and multi-sig, the crypto wallet ensures that transactions are safe and secure.
- Creation of listing – Post wallet integration and smart contract development, the tokens minted are listed on the exchange platform to generate funds.
On the last note, I would like to conclude this blog with a statement that if you are an entrepreneur and want to set up a business without sufficient funds, then launching a token would be a great idea to raise funds. For this, you may contact any firm that offers ICO development services.