Most known ICO Advisor mistakes
ICO model of fundraising still rates high as the new startup appear on the market and there seem to be no end of ideas fueling the numerous blockchain based-start ups. However, the cryptocurrency market is far from its former heights, and the overall cap state is not astronomically high.
Certain prominent industry hype-trainers like John McAfee claims that the BTC price will touch $500,000 by 2020 and even the ICOBENCH report is optimistic with the prediction of the overall market recovery in early Autumn 2018.
ICO advisor is a person responsible fro project development vector, the one that can help in overall idea development and director, concept creation and expert in a specific industry field. All these qualities make him essential as a team member.
Being a famous industry person or a highly-valued professional increase a chance that a team will use advisor as one of their trumps card and investor’s hook.
Problem is, a lot of start-ups creator did overuse that practice, having attract prominent names just to be listed in the project and without having a direct impact on the development process.
One of other problems is the lack of understanding. The hired professional can be the best marketers, analysts or economists, but when it comes to understanding decentralization, and based on these singular utterances their understanding could be quite limited.
Moreover, right now there is another quite popular rumor on the market – as nobody is interested in ICO investing anymore and there are days of this idea left to be profitable.
No wonder that over the years of million profits going to the scam projects, the regulation around ICOs has finally tightened and many countries had already made their points clear and issues the policies on so-called ‘utility tokens.’
Nowadays, the tax-havens are tricky topics as continually changing regulations make companies change their location quite often. What seemed to be easy to handle a year or a month ago today represents a stricts laws so what will the next day bring is always a question.
Things is, despite all the fraud, exchange hacks, and increasing legislative bodies regulation attempts, the amount of money in this industry gets higher and higher every year.
Due to the latest statistics, the market dynamic is definitely positive. The volume of funds attracted worldwide through the ICO for the first quarter of 2018 was $ 3.3 billion. For comparison, in 2017 with the help of ICOs, $ 6.1 billion was raised. The well-known rating agency ICORating provided the data.
As for geography – most of the ICOs were conducted under the United States jurisdiction – 59 projects totaled about $ 583.8 million; in Singapore – 34 projects raised about $ 468.1 million, and in the UK 26 projects raised $ 99.7 million. In Russia, 13 projects raised about $ 20.8 million.
During this year, the overall number of non-accredited investors investing is expected to reach the same number as the number of non-accredited investors in equities and other capital market products.
We sold the decentralization protocols to them as the silver bullet that would usher us into the era of equitable wealth distribution. This turned out to be a lie.
Another deal-breaker for the small investor is the terrifyingly frequent pumping & dumping of the market’s unworthy altcoins. Due to many advisor and consultants, specific points should be outlined of what documents should be issued before meeting investors, private or otherwise. If neglecting them, there is a slight chance that not even the best ICO Advisor could help to raise funds.
1) Decent project tokenomics. While working on this part, specific rules should be followed as well as specific criteria to derive the token price, utility, and the total number of tokens mined.
2) Tokenization plan — in case of utility token route, one must find out the best fit for tokenization. Most ICOs these days tokenize the access to the platform badly.
3) Working MVP — Most conservative investors whom I reached out to, “I wanna see how much skin do you have in the game.” What I learned from that conversation was that if the ICO had not invested at least 30% of the planned ICO money from their own pocket, investors are not going to like it.
4) A scalable business model —which is strong money attracting plan. However, it is not about appreciation of token utility and burning of unsold tokens. Explain why will people come to your platform and how will you monetize their interest.
5) Investor pitch deck — An investor pitch deck must definitely have an elucidation of the business model, existing user base, and team credentials. Additionally, it must have an explanation of your product’s features and scalability potential.
6) Elevator pitch is the thing that most often. It is useful for pitching an idea to the potential investors that you might meet at meetings and seminars etc. It is better to have an elevator pitch and save yourself from explaining the white paper to someone at a dinner party.
7) Team with decent credentials — a great idea and smart contracts are not always enough to present the successful product. Most people look for those team members who have legitimate experience in that particular space. Having a cryptocurrency advisor whose only claim to fame is that they became ‘Experts’ on ICObench does not cut ice with investors anymore. In case with ARK ICO. They have a team that has been in the business of managing seafood logistics of over 50 years combined.
8) Social media traction — if the product is so revolutionary, it must reflect on social media. While a part of your social media outreach can be seeded inorganically, you must refrain from letting it go beyond 20%. There are tools to find out the engagement on social channels such as Telegram, and it will reflect poorly if these reports come out adverse.
9) Practical market strategy — as investors and buyers have an uncanny ability to fish out the rotten eggs and reject them.
As of Q3 2018, the ICO could not be regarded as a scheme to get easy and fast benefits from as we need to provide much more than the usual white paper to attract funds. One may also have to fork out equity to the private investor if you are really strapped for funds.
For now, there are no magic recipes to win in ICO market ultimately. One has slight chances of failing even with the decent team. If your marketing, product development, and the team credentials are great, you will raise funds.
However, there is no point in going pessimistic with your perspective ICO idea – the history had shown that even in times of hardships and calamity, man has invested, for profit or for fun.