Whether you're planning a private sale, pre-sale, public sale or fire sale you need to realize raising capital is not easy. With the growth of scams, shitcoins and security regulations every smart founder knows they have to level up to achieve success.
You don't want to be the next Konstantin Ignatov. After his OneCoin project was exposed to be a pyramid scheme FBI agents arrested him at Los Angeles International Airport (LAX) on conspiracy to commit wire fraud charges. And remember Shinil, the South Korean company that announced it had found a $190 billion treasure-trove? The claim reeked of scam but they reportedly attracted $53.7 million in investments from around 100,000 investors. Later the company assets were frozen and top executives arrested.
These types of stories in the crypto space have caused potential investors to wise up and do more research and homework. Retail investors, institutional investors and traders all recognize many ICOs and STOs are overvalued and risky. There are not the Golden Days of free flowing investor cash because you slapped 'Disrupt' or 'World's First' or 'Revolutionary' on your website and whitepaper. Cmon bro, step your game up!
Trying to bring your crypto or blockchain project to financial success will require a strategic approach that includes avoiding each of the following 7 Deadly ICO Sins. And while this list is not all encompassing these are major pitfalls on your quest to obtain Other Peoples Money.
1. WACKY WEBSITE
Poor visuals and graphics, confusing navigation and error-filled text/copy are definite red flags. Is the website current and up-to-date? Does it provide the information potential investors need?
2. BUSTED BUSINESS
Is an ICO the best route for your business? What role does blockchain play? What problem does your project solve?
3. CRUMBLED CODE
When someone creates a new cryptocurrency it has to be implemented through software. The tech solution has to be translated into computer code. Is there an alpha version, beta version, or GitHub repository?
4. WEAK WHITEPAPER
This is the backbone of the ICO project. It should be well-structured and easy to understand. A good whitepaper explains the business details and the technology solution.
5. CONFINED COMMUNITY
An ICO depends on a robust community for investment and that audience needs to be well defined and engaged with the project from the beginning. There should be hype and buzz about the project before the ICO is available.
6. TERRIBLE TEAM
Who are these people? What are their strengths? Investors want to see actual professional profiles and proven experience related to the project. If you can’t find them on Google, LinkedIn, GitHub and at industry events they probably won’t impress investors.
7. MINIATURE MARKETING
A beautiful coin with a memorable name, attractive logo and a hook for a tagline is a powerful branding message that will take you a long way with investors. If a team is seeking to raise $US5 million or more, and not willing to spend at least 5% on marketing and PR efforts then stay away.
If you're serious about your project and the audience you want to serve be sure to check tick the boxes on the list above.