There are things that must be considered in understanding what is commonly known as an Initial Coin Offering or “ICO”, and how you go about preparing yourself for long term viability running an ICO. For someone with no technical background it could be too difficult to understand the concept beyond the basics. Here at Camuso CPA PLLC, we provide consultations and services for better understanding and ease in doing business. Initial Coin Offering (ICO) is a new business paradigm supported by blockchain technology.
The ICO is a fundraising mechanism. The amount of money being raised through initial coin offering has bubbled more than its size. To make your token popular and encourage the investors to buy it during the ICO, you need to use the token that is fully integrated into the company structure. The success of this tokenized concept is built behind with several factors, to consider its longevity in the market and soon becomes stable market avenue for investors.
It is also significant to figure out how ICO works and which model suits you best. Several questions need to be answered to make sure you really need a blockchain and the ICO.
- Does your product need blockchain?
- What advantages of the blockchain technology can your product enjoy?
- How can you functionally link a blockchain token to a product?
- How can your token be of interest to investors?
- Is there a mechanism that links its value to the success of your product?
- How will your offer fit into existing laws?
As entrepreneurs, miners, and crypto investors one should have pre-flight checklist of all things to consider thinking of investing and running an ICO. Primary considerations should focus more on these significant contributors: Community and Network, Campaign and Technology, Legal and Regulations Considerations, and Marketing Instrument.
Community and Network
Is there a community that a project can be impacting, with solid interest about cryptocurrency and enough network that you can build interactive business with? And a team that can manage and handle cryptocurrency inquiries? The main channels of communication here are the social media – Twitter and Facebook, and the forums (Bitcoin talk and Reddit). Consider the option of hiring a professional whose job is to monitor and participate in the dialogue with your audience on those websites. From an investor’s standpoint, a great team behind the project is one of the most important factors when deciding to contribute to an ICO.
Campaign and Technology
There is one question every startup should ask before deciding to even have a campaign. That is whether the ICO digital token can be integrated into the business model in a meaningful way? Do research and invest more on the technology. Make sure to use platform that is already proven and tested. It is also important to have secure mechanisms for how you inform investors on how to invest. There are special platforms out there, whose entire purpose is to ease both the process of launching an ICO and investing in one.
Legal and Regulations Considerations
Each country may have its own specific rules and regulation to take into consideration, in the United States Securities and Exchange Commission plays vital role in regulating the widespread phenomenon of cryptocurrency. The issue here is that you may be hit with significant fines or worse for selling tokens defined as unregistered securities to US citizens or even if you are a US citizen or working from within the US. Breaking the law is the first and the most obvious thing. When dealing with other people’s money you must make sure that you aren’t breaking any laws every step of the way.
After considering legal regulations and choosing the right technology, ask yourself, are these enough to get you fully ready for an ICO? An ICO industry is a fast-paced market thus it’s important to go to the public and find investors early to get feedback on the project and the ICO before launching it. Unrealistic or unclear goals are a major deterrent to investment because they make an impression that the team either don’t know what it’s doing or, worse still, is trying to actively scam people out of their money.
Because of that, it is imperative to have a white paper and a road map prepared before the launch of an ICO. The white paper has to clearly outline the technical aspects of the product, the problems it intends to solve and how it is going to solve them. The road map must list clearly defined and realistically achievable goals and their time frames.
Achieving the marketing, legal and technology elements can be very expensive yet with the positive positioning and momentum to achieve long term goals-is possible. With this information, you are now armed with the knowledge needed to safely, securely and legally launch your own successful ICO. It seems cryptocurrency is going nowhere but up right now, make sure to convert your crypto position in a responsible manner for money that is essential to keep your business running.
Here at Camuso CPA PLLC, we do have the ability to offer services to our clients. If you are interested to know more about this investment and how this might benefit your business, please don’t hesitate to give us a call today. One of our friendly and knowledgeable representatives will be happy to answer any questions you have.