The new world of cryptocurrencies and Blockchain is rapidly accelerating and has already passed $100billion in market capitalisation. ICOs (or Token Sales) now outstrip traditional Venture Capital funding, and this new Capital Market Economy is proving more and more popular with technology orientated entrepreneurs seeking to fund new businesses, many of which would fail to raise money in the VC sector.
With the introduction of regulation, raising capital via cryptocurrencies will become even more complex than it is already.
The Chainstarter approach has been deliberately crafted to be compliant with whatever regulation may come along, and we are the first platform of our kind to offer full, multi-currency KYC and AML compliance to entrepreneurs who wish to avoid falling foul of regulation.
These are some of the major questions we are asked on a regular basis, however if you can’t find the answer to your question here, drop an email to our Senior ICO Advisor Obe Ayton, who will be happy to help.
How do I work with Chainstarter?
Can you write my White Paper for me?
What is a token sale?
What is an Ethereum ERC20 Token?
What is a Smart Contract?
Which Ethereum Wallets can my Investors use?
How do I reach my audience?
An ICO website that clearly articulates the background of your project and the details of your campaign (time, date, how to get involved)
A Social Media strategy – covering the primary channels: Facebook, LinkedIn, Twitter, Slack, Telegram, Reddit, STEEM etc.
Articles and announcements that inform and keep your audience informed about your project
Content – Videos, podcasts and interviews of the founders explaining the project An advertising & PR budget of not less than $25,000
How much time do I need for my Token Sale?
This will also depend on how large or experienced your team
is and what content and assets you already have in place, for example, a media team, credible White Paper and Business Plan.
What else is involved?
Most importantly, your Customer Services team will need to be operational 24/7, as Token Sales do not recognise your time zone! The crypto community will have questions which need answering. This is particularly true during the period of the sale itself, and your ability to respond quickly and appropriately to an email, Social Media or Slack channel question could well mean the difference between an investor taking part in your sale or not.
Finally, your crypto economics must be sound and the input parameters for the Smart Contracts must be bullet proof.
Who is my audience?
They all have different reasons for making their purchases.
Crypto Traders – Savvy investors who may see longer term value in your proposition.
Crypto Whales – People who buy large quantities of Tokens but who may dump them for whatever profit they can get as soon as your token starts trading on an exchange, in order to move on to ‘The next big thing’.
The Crowd – These are the people, usually smaller contributors, who will use or support your product or service.
First Timers – People new to crypto who may be engaged by your proposition but who currently not engaged in cryptocurrencies. This group require a degree of education, but often remain loyal to your Token as it was their introduction to crypto.
Banks, Investment Funds and other regulated institutions who see value in both your business idea and your Token value over the medium to long term. If you are seeking to attract this type of investment your Token Sale must be fully compliant with regulation or legislation in force in any jurisdiction where you are seeking to operate.
Why do I need Customer Services?
Token Sales reach a lot of people, all over the world, who have many questions and will require information and help. Chainstarter supports the Token Sale process and can provide you with the relevant and appropriate answers to the “where are my Tokens?” questions when the sale is closed, but only you can communicate with your investors once the campaign starts and the ICO is live.
How do I avoid scammers?
How much will my ICO cost?
If you have a dedicated and experienced marketing team, a successful ICO can be delivered for less than $50,000, and depending on your funding requirements, as little as $25,000.
What about regulation?
If your Token is offering a return to investors, a dividend or an equity in your business, or something else of value, this will undoubtedly require further consideration and research.
The only time it is not necessary to consider regulation is where your token is sold with no prospect of a return for the investor, such as the setting up of a Foundation or where the token represents the value proposition in and of itself.
What is the difference between an ICO and an IPO?
And IPO is an offering of a regulated security or ‘Share’ in your business through a regulated exchange to registered and vetted investors. Investment is received in traditional or ‘fiat’ currencies and can be banked and spent in the usual way in accordance with the use of funds set out in the investment prospectus.
An ICO is offered direct to the crypto community specifically. Technically speaking, anyone holding cryptocurrency can take part in your ICO, and because funds are generally received
in cryptocurrencies you must then have a facility in place to convert cryptocurrency to fiat currency or make the cryptocurrency fungible in some other way in order to use the funds to develop your business.
How do I convert my sale proceeds from Crypto to Fiat?
If you are a truly Blockchain focused business, this will be your ideal method of operation – it’s true to the ethos of Blockchain.
If you need to convert crypto to fiat (or ‘Cash Out’ as it is referred to among the community), many exchanges now offer corporate accounts which, with the proper level of KYC / AML on your application, can allow conversion and movement of quite large sums of fiat currency into mainstream Corporate banking.