58% of ICOs did not reach the soft cap (and 8 tips to avoid it)
According to ICORating reports, 58% of ICOs did not reach the softcap.
But reaching the softcap did not guarantee success. Those 420 ICOs that reached the softcap but did not list on an exchange, 52% was inactive after 120 days. But this is another history. This article is about raising enough funds to survive.
Nearly half of all initial coin offerings (ICOs) in 2017 and 2018 failed to raise any funds, while another 40 percent raised more than $1 million each, a new research report claims.
Research and consulting firm GreySpark Partners studied the ICO market across the past several years, finding that as many as 890 token sales did not raise any funds at all.
Data is clear. You have around 50% of not raising enough money during the ICO process so you can continue developing the project.
So, in order to be one of the successful ICOs you have to do a lot of things correctly:
-Select the right team
With a balance between business experience and developers. All of them should have LinkedIn
-Create an MVP of the product (if needed)
An MVP (Minimum Viable Product) is a sign that your project is a serious one. According to ICOBench stats, 53% of ongoing ICOs has an MVP.
-Design a professional website.
Secure, because standard websites are easy to hack. Fast, because 25% of the visitors will abandon the page if takes more than 4 seconds to load. The website is probably the first thing the investors will see of your project so should provide a good first impression.
–Run through a KYC/AML process for identity verification of investors.
You have to avoid at all costs that investors could think that your ICO is a scam. KYC/AML is a useful tool to show that you are a serious project. A recent study prepared by ICO advisory firm Statis Group revealed that more than 80 percent of initial coin offerings (ICOs) conducted in 2017 were identified as scams. You don’t want your ICO to be marked as a scam.
As a rule of thumb, the marketing budget must be, at least, equal to the development budget. I could not emphasize enough the importance of marketing in an ICO. I have been involved in both, design and technical perspective being developed perfectly but failed to spread out the word to investors.
-A secure coin.
Ethereum is the king by far on creating new crypto coins. Use one based on openzeppelin, which is praised for their security. Being hacked is not an option.
-A 1-4 pages teaser.
Contract a good designer and condense in a few pages al the relevant ICO’s information. This is critical. It has to answer questions like “How the tokens will be used?” or “How will the investors make money?”.
-A solid business model.
Most of the entrepreneurs did not have a clear understanding of how the blockchain integrates into their projects, or that writing on the blockchain has a cost.
As you probably saw, I’m not mentioning the white paper or the video. These two are “nice to have” features, but are not as decisive as you may think. Currently, more than 100 ICOs are open so, do you really think that an investor is going to read 100 white papers, each one with 20 or more pages? Obviously no. The decision to be in the shortlist that worths going deeper have been already taken before reading the white paper.
And the same is valid for the video. Is a good idea to have a video explaining your project on the website, but is not a decisive factor.