What to do before an ICO?
It seems the biggest ICO craze is past us when companies were raising ludicrous amounts of money even for the most ridiculous projects. The market has sobered a bit, and investors are more careful and picky about the projects they invest into. This is only healthy for the whole industry.
Still, regardless of the stupidity of some of the projects that got invested, ICO is still a revolutionary method of raising capital and isn’t going to go anywhere anytime soon.
Here at Comistar office, we have a continuous flow of new ICO inquiries. There are so many of them, that we decided to write this short article about what we’re expecting from an entrepreneur that wants to work with us to comply with the regulatory matters of Estonia.
First, and the most important thing we expect is that the client has to have a ready white paper. The white paper is a business plan, and it has to be a thorough one. There are projects planning an ICO, and they require help in writing the white paper. This is not what we do. A client has to have a full understanding of the business they are going to conduct, and they have to understand every part of it. If they are not capable of writing their own white paper, then it’s very likely they are not capable of going through the ICO.
If the client has a white paper, the second most important thing is the team. ICO is not a one-man project. It’s not a two-man project either. There has to be dev team, a community manager (s), CMO, CFO etcetera. It’s a very big project, usually no less than 6 months from the start to the finish (white paper, community building, marketing etc). And it’s not only the number of people in the team but their background and experience that matters.
We’ve seen projects so complex, ambitious, and impossible, that even a team consisting of Elon Musk, Mark Zuckerberg, and Jeff Bezos wouldn’t pull it off. These projects usually consist of inexperienced entrepreneurs and developers.
Why we, as a service provider, care about that? Because people’s money is at stake. If people invest in the projects that sound great, but will never be executed, we’re helping just another scam.
Third, and no less important, is the financial capacity. There are inquiries where people want to launch crowdfunding campaign to fund the ICO. Funding to execute another funding. Maybe, but not very realistic plan.
Yes, we can understand that the ICO is done to raise money, but there has to be some basic financial capability to execute the ICO. To do a successful ICO you have to consider the marketing costs, compliance and legal costs, and other miscellaneous costs that occur. If it’s a good project, then there are often very early stage angel investors/advisors that contribute the needed money for an ICO. It’s good if you can find at least one early stage investor and reputable advisors, as it means someone else believes in the project as well.
If you are actually ready to launch an ICO, then how can we help you?
The most common services we offer, are:
- White paper analysis (includes tax and KYC analysis)
- Token sale agreements
- Terms & Conditions
- ICO promotion in the Chinese speaking blockchain communities (China, Taiwan, Hong Kong)
- Community management in the Chinese speaking blockchain communities (China, Taiwan, Hong Kong)
- Introduction to the exchanges, KYC/AML software providers, banking/fintech introductions
- Syndicate investments and raising capital from China
Estonia – the most ICOs per capita
Our friends at btxchange.io have created an excellent infographic on the funding of ICOs in the recent years. And the most ICOs per capita? Estonia.
ICO guidelines in Estonia
We at Comistar are big proponents of cryptocurrencies and blockchain technology. ICO (Initial Coin Offering) has become a buzzword around the world, and preferred method of raising funds for blockchain companies.