Akasha is editor of missblockchain.tech, a general ICO advisor and Engagement Director at iomob.net – she is available for consultation on experty.io
I’ve talked to people who try and run ICOs without doing a private sale first – they didn’t know to do a private sale, because no one had told them it was an option. Some things are held close to the chest in the crypto world. It’s about who you know.
A private sale is an important step, because it lets you test the waters with your white paper and see what the response is – warm, hot, or very very cold. Typically the investors are accredited funds, venture capital and family offices. Or, it might be accelerator hubs funded by blockchain protocols or exchanges.
If you don’t do a private sale, and test your white paper against accredited investors, as it may be that your white paper has fatal flaws that will detract away from public investment – that you won’t know until you’ve already spent hundreds of thousands on marketing.
With the investment climate the way it is – 50% of ICOs in Q2 2018 didn’t raise more than $100,000 USD – getting it right early on is more critical than ever for your project to make the distance.
What are investors looking for?
Based on my conversations with managers of large investment pools, I’d say they are looking for a number of things that the average ICO startup team might not have considered.
1. Lock up period.
They want a low to zero lock up period of tokens. Consider being flexible with your lock up period to hook an early stage investor.
They want to know what exchanges you have already lined up to list your token post ICO. (Don’t go live with this information, keep it private until post ICO.) Reach out through your network and find people who can introduce you to big exchanges for good value.
They want to know that a high percentage of your tokens will be sold during ICO, so work your tokenomics until your model has at least 65% sold during ICO. This will insulate the project from dumps by the team, and is a prima facie indicator the project isn’t a scam. This number isn’t set in stone, and listen to feedback here from potential investors who are interested.
Is that all they look for?
No. You need a unique business model and proven business case, too. You need a solid team with real world experience in the project’s field of operation. But just having a strong white paper can be let down by not paying attention to these three seemingly minor details.
Add these final details to your private pitch, and you’ll have an appealing investment prospect for serious early stage investors to consider.
Want guidance reaching out to investors? Or an introduction to accelerator hubs? Connect with me on LinkedIn.
Akasha with the http://cryptocoast.co Principal Sponsors Modern Assets, and Karen from conference partners the Blockchain Centre: