As tokenization takes over the Blockchain wave, ICOs (Initial Coin Offerings) are becoming the go to choice for most startups. The ease of quantification of the product or service, access and traceability of the tokens are the chief reasons why tokenization is a sought-after option.
What makes ICOs particularly interesting for startups is the convenience of raising capital for growth and expansion. The fact that an ICO can make the reach to this funding a global phenomenon and have relatively lesser regulations at the same time makes it worth the chase. In some ways, ICOs are like the new catalysts of the crowdfunding economy.
THE ICO CHECKLIST
While there are no defined norms to get an ICO right, the following applies for most ICOs and startups in general.
- Great Idea
While this doesn’t promise success, it is a good start.
- Great Team
This is the vital make or break element in most startups – a team that plays together succeeds together. Having a holistic team that can play on strengths and balance out the negatives is half the work done.
A well thought out marketing is core to getting the idea rolling out into reality.
- Does an ICO fit the business model?
Not all startups can and should be tokenized.
- Is the timing right?
As clichéd as it is, timing is really everything. An idea may be brilliant but worth nothing if your market is not ready for it.
When it particularly comes to the ICO, there are definitely a few questions one should ask before embarking on the ICO route. As Patrick Lowry, the CEO of Iconiq Lab says, “From the entrepreneurs perspective, before considering how to make a successful ICO, it should be heavily weighed if tokenization fits within the proposed business model and if it solves a pain-point within the industry of the startup. Many skip this step because they see the dollar signs of an ICO, and rush putting together a project or team to attract funding. Anything can theoretically be tokenized, but it needs to be evaluated if it should be in certain industries today. Timing and market acceptance is a crucial factor here, as it is in any venture.”
(Refer https://cointelegraph.com/news/for-successful-ico-these-things-must-be-put-in-place for a detailed debate on what must be in place for a successful ICO).