ICOs have empowered aspiring entrepreneurs to raise large sums of funding through virtual currencies from global investors over a short period of time

The year 2016 saw over the US $200 million worth of cryptocurrency investments raised through the ICO (Initial Coin Offering) process. The ICO market has exploded in recent years, with over US$1.5 billion raised in the first half of 2017. ICOs have empowered aspiring entrepreneurs to raise large sums of funding through virtual currencies from global investors over a short period of time.

In this article, we would like to share four tips for all entrepreneurs who plan to embark on their first ICO. This will be the first series of educational articles written by the team at FundYourselfNow and we aim to help all aspiring entrepreneurs looking for guidance on how they can run their ICO better.

1. Keep your ICO Secure

Every day, there are hacking attempts on websites and crypto wallets. If you are running an ICO, be prepared for the possibility of being a target of hackers who will attempt every means and ways to steal user information and money from you and your potential ICO participants.

Just recently, a critical exploit into a smart contract by Parity multi-sig wallet version compromised over US$200 million in Ethereum. Hackers successfully stole over $32 million from ICO compromised wallets. In July 2017, an ICO for a project called CoinDash was compromised. Hackers changed the ICO address, which resulted in over US$7 million stolen from backers.

As illustrated by the above examples, security should be a top priority for everyone conducting an ICO. Here are some operational security tips that you should consider for your ICO:

  1. Use different randomized passwords for key accounts such as Twitter, Facebook, website, Slack and email accounts. This will ensure that even if one account is compromised, the rest of the accounts are safe.
  2. For critical infrastructure such as the web host admin passwords, ensure that passwords are ONLY shared on a need to know basis, with employees that you can trust.
  3. Mandate 2-Factor Authentication for your company staff where possible. Twitter, Gmail & Slack has 2FA functions that will stop hackers even if the account password has been compromised.
  4. Have a full-time community manager monitoring your ICO slack & telegram chats. Check the member list regularly and proactively ban members with suspicious names (e.g. your company founder name) or throwaway email address (e.g. yopmail email accounts). Educate your slack users to ignore phishing messages sent by slackbot or non-admin users.
  5. Release your crowdsale address in advance and inform your community about it. Use the Ethereum name service to purchase an address that can be easily remembered by your community.
  6. Use a hardware wallet, such as Ledger Nano S or Trezor to access your ICO smart contract/wallets or store funds. Lock up your wallet in a safe so that it doesn’t get stolen or lost.

Also discuss: Should an ICO be considered as fundraising, or is it revenue generation?

2. Free and Effective Marketing

You need good marketing to make your ICO successful. Be sure to take advantage of free public channels to promote your ICO to a large and targeted audience!

Forum Boards

Channels such as Bitcointalk and Reddit are extremely powerful to reach out to the crypto community. Bitcointalk has the largest crypto-community and ICOs are announced every day on the Altcoin discussion thread. Having an active thread and presence on bitcointalk months prior to commencing your ICO will go a long way in building up hype and momentum for the project launch.

Another way by which you can promote your ICO is via Reddit, where you can make your own subreddit, or post information related to your ICO within popular Reddit boards such as /r/ethtrader, /r/ethereum and /r/icocrypto.

3. List your ICO on multiple websites

Listing on ICO websites will help you get the word out quickly. Popular English websites which are free to list include icoalert.com, Smith & crown, tokenmarket.net, urbancrypto.com,fundyourselfnow.com (in future) and many more. For an additional cost, you can pay for a premium placement or advertisement slot on the listing website to promote your ICO.

You will also want to look at translating your content and Whitepaper into multiple languages, such as Chinese and Russian. For instance, listing on bizhongchou.com (China) will allow you to get access to Chinese backers.

4. Give people strong reason to get your tokens

To get backers, you need to explain the rewards that your token holders are entitled to. The most common token model is the utility model, where the token is used to purchase services or products on the platform that the project creator is building. For example, tokens could be used to trade for exclusive weapons & skins in a video game project. This ensures that the token has an inherent value and there will be sustained demand for the token once the platform is launched. As a side benefit, utility tokens tend to be more easily listed as exchanges prefer coins that have transaction volume.

When coming up with the token model, you want to avoid structuring it as an equity/debt token, which will make it a security. Selling securities is a regulated activity in most countries. Examples include tokens which have a profit sharing or dividend mechanism to reward token holders.

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The author, Kenneth Tan, is the co-founder of FundYourselfNow.com (FYN), Southeast Asia’s first one-stop cryptocurrency crowdfunding platform that leverages the latest blockchain technologies. If you need help with your ICO, do get in touch with us at contact@fundyourselfnow.com.

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