The world keeps buzzing with different kinds of technological development.
Technology is doing everything possible to invade every aspect of our lives.
And it seems to be doing it without any reservations or apologies whatsoever.
These tech lovers have also brought their cravings into the business transaction space.
Now, the business space is more aware of things like cryptocurrency, and people are getting more and more involved with the study of blockchain.
For you to be reading this post, you must have heard of this term before.
What is uncertain is whether you know much about the term.
Well, that shouldn’t be a problem because this is what you are about to learn in this post.
You are going to know how initial coin offering can be used as a fundraiser for business startups.
Hang on as you embark on one of your most thrilling adventures in the area of seeking after fundraising strategies.
An excellent place to start from would be to know some of the reasons why companies and entrepreneurs across the world are now turning to initial coin offering for their business endeavors.
Simply put, here are some of the benefits of using initial coin offering as a fundraising means.
Benefits of Initial Coin Offering
First, it gives you a chance to do business with as many investors as you can imagine.
An incredibly 90 percent of European and American banks now explore blockchain.
Taking advantage of initial coins offering will merely mean more and more investors for you.
So you can decide to increase your customer base today by merely switching to using ICO for your business transactions.
Secondly, there is an increase in liquidity.
Now, it is not about doing business, but you can also trade initial coin offering.
The liquidity of this medium of exchange is one mystery that has kept the world guessing how it is done.
Don’t worry about that; it is a story for another day.
It is good that you now know some of the benefits that come with using initial coin offering for your business transactions.
But while you are still smiling at these incentives, it is good you know the challenges that accompany the use of such currencies.
What You Need to Know
1. You Need to Choose a Jurisdiction
You do not just jump on this train because you feel it is okay without knowing the jurisdiction that will favor you.
Even if you have a tokenized asset, you still need to make sure you can find the appropriate jurisdiction that will be most suitable for you.
Some jurisdictions will regard your initial coins offerings as security.
Different places with their various jurisdictions, hence, you need to find the one that suits your needs the most.
2. Understanding Tax and Compliance Laws
Cryptocurrencies are yet to be recognized one hundred percent globally.
Ensure that you are only doing your transactions around places where initial coin offering has been thoroughly approved.
If it is going to help you understand this any better, some places are still adamant about the use of initial coin offering for business transactions.
But then, you can understand their position.
Most of this financial regulatory bodies still do not have a good understanding of how blockchain functions.
Laws for regulating cryptocurrencies are still very dynamic for now.
Until the world is prepared to ultimately accept it, you will need to make sure you aware of any changes that may arise.
Also, make sure you are well informed of the tax compliance laws.
Know your customer requirements
Here is another thing.
You need to know who you are dealing with.
Before you do any transactions, make sure the identity of your investors is fully verified.
While there are organizations that allow anonymous transactions, others advocate that you verify the identity of your business partner before you do anything.
Thank goodness a company like Civics was born to solve this problem.
No more hassles are arising from investors’ verification.
3. Blockchain Management Considerations
After your initial coins offering, there are still a couple of challenges that one has to deal with.
For instance, there are specific regulations that prevent investors from selling their tokens in their very first year.
Depending on the way you are structuring your offering, you may need to exclude investors from the United States of America from buying your tokens.
While fundraising through an ICO has to be carried out with great caution, the blockchain market is proliferating.
The blockchain technology makes life a lot easier when seeking for investors, but one still needs to be very careful, so you do not get burnt.
Initial coin offering only presents you with an opportunity to reach out to a broader group of investors.
What Initial Coin Offering as a Potential Fundraising Means
While it is natural for so many people to doubt the transparency behind blockchain technology still, some others are doing everything to get involved in the thick of the action.
With some level of optimism, people are beginning to believe that 2018 will witness the highest surge of initial coin offering.
How accurate this may turn out to be is entirely subject to past statistics as well as the will to believe in the future of cryptocurrencies.
According to a report that was published by LendEdu, out of the 79 percent of Americans that have heard of Bitcoin, only 14 percent own one.
This is what also tells you that there is more to come in the world of cryptocurrencies and initial coin offerings.
A lot of things are going to change with time, and that is for sure.
In the past entrepreneurs had to look for investors the hard way.
It was the scariest part of any business.
Hence, they were substantially limited in their quest to get reliable investors.
Virtual Currencies were the only source of investing.
But great thanks to young lads that came up with cryptocurrencies, they have done a lot of good to entrepreneurs.
Currently, a global exchange means in the form of initial coin offering has changed everything, and entrepreneurs are having a stroll in the park in the area of securing investors.
It is excellent to explore the opportunities that come with ICO but before you do that here are a couple of things you could do to keep you on the safe side of the bridge.
Testing the Water
There is no doubting it that exploring initial coin offering has turned out to be an exciting adventure for many businesses.
But making a direct move in this regards without considering how your business is going to fit nicely into ICO plans can be a disaster.
It is like jumping into a car and driving without actually checking the machinery of the vehicle.
You can tell where that car will land you.
You need to check if blockchain decentralization is going to provide any advantages for your product.
If your business is not ready for the volatility that comes with ICO, then it will be best for you to take a bow out of the race.
Initial coin offering is always going to be there for you to implement in your business transactions so do not rush into it and destabilize your business plans.
It is true that some businesses have experienced a sudden boost in their revenue, thanks to initial coin offering, but you still need to be very sure it is going to work for you.
Just because it worked for Storj does not mean it is going to work for you.
Storj had sold a lot of their tokens to investors and made over 30 million dollars in a brief time.
This is a simple thing to understand.
Their business model was suitable to work with initial coin offering.
Whether you agree or not, for now, ICO is not for all businesses. Not yet.
You Need to Be Prepared
Before you make any move for any ICO, you need to ensure that your product is up to it.
I mean you should have a mature product.
This is not something you want to try out for a product that cannot cut any ice or a new product that cannot impact the consumer community.
Businesses usually come out with one slogan.
This slogan is having a product that has come to change the face of the market.
They all say it, but at the end how many products revolutionize the market?
So many ends up not doing anything.
If this is the kind of impact you intend to make with your product, then you had better sit this one out.
You should see this as your traditional business plan where you state what your product can do regarding solving specific needs for customers.
Whatever you dim fit for any traditional business also fits for this before you move into exploring initial coin offering.
These detailed requirements are essential to your success in this regards
The reason is that it helps potential investors to relate to your product quickly and better.
Writing out those details goes a long way to tell them how they can trust in the product and how they will be duly rewarded for their investment efforts.
You should also have it at the back of your mind that if your product does not reflect any serious value, your chances of selling off any token will be low.
A low-value product will equally affect your token security, allowing the government to almost clamp down on your product.
This is not good for the brand you are trying to sell.
Hence, in all, you just need to be prepared before venturing into ICO.
Building a Community
Your token’s value is directly determined by how the community embraces it.
For you to make the most of your tokens, you will need to make the right impression on the minds of your potential investors.
Naturally, you need some time to create a community of this sort.
Do not be fooled by your fantasies to have a successful community pop out of nowhere.
That is hardly ever going to happen.
As it is with any other business, you need to carry out aggressive marketing to get this one done.
While you are at this, you should remember the essence of timing.
It is never too early to reach out to your community of customers and engage them on what they stand to gain with your product.
So if you want complete success with your initial coin offering, you need to start early enough.
Some of these hangouts include Facebook, Reddit, Slack, etc.
In these social media platforms, you can create a community without any hassles.
And with your forum kick-started, you can get people of like minds to engage on your ICO.
Try to be as open-minded as you can ever be.
It gives you the opportunity to entertain feedbacks from all over the world.
For instance, many countries are beginning to switch their allegiance in the area of supporting cryptocurrencies.
Always remain positive about achieving things, you should never be discouraged.
As for springing up a thriving community of your customers, you need to start from somewhere before it can become significant.
So get on with it and stop being cynical about how it is going to fly.
Be Aware of the Risks
Honestly, there are so many risks when it comes to initial coin offerings and cryptocurrencies.
Deregulation and volatility are just some of the areas you need to be informed of.
These are areas that are continually being worked upon to improve the cryptocurrency ecosystem.
So while you are aware of the risks, it is not the same thing as getting scared of exploring an ICO.
You should know by now that any revenue system does not support assets produced by an ICO.
So if anyone loses a token or loses an asset that is tied to a token, that currency cannot be accounted for.
Some people strongly believe that the whole cryptocurrency excitement is going to come to an end someday.
At least that is what they wish.
Others believe that there could be a small nip in the bud for cryptocurrencies because of their volatility.
But whichever side of the bridge you seem to find yourself, saying that cryptocurrencies will suddenly come to an end one day is some big joke.
Bitcoin is the most popular cryptocurrency, for now, so you can start from there.
There are times its value depreciates in the market, but on so many occasions it has bounced back.
You would naturally expect it to.
Therefore, if you are waiting for the cryptocurrency market to crash one day altogether, you may have to wait for as long as forever.
Not good news for the cryptocurrency and initial coin offerings critics, but that is the hard truth.
So if you are on that side of the bridge, you will have to swallow that bitter pill of truth.
In summary, you have heard what you needed to understand
Also you now know what you need to know concerning initial coin offering.
You now know that there are a lot of things one needs to take into account before jumping into these waters.
Otherwise, you hurt yourself in the process of trying to search for investors.
You also learned that there are some significant risks with ICOs, and as such, you have to be careful in the way you deal with them.
You have heard the good, the bad and the ugly.
But whatever you have heard, the fact remains that the grass is still very green for ICOs.
Also, every smart business owner is supposed to take advantage of it.
It is a risky wave, and it is a wave that is worth riding on.
Explore the ICOs and have your business moved to the next level.
Build a global presence by merely implementing ICOs in your business today.
You certainly have no idea of how much you can turn things around in this regards.
Move with the ICO trend and don’t get left behind.
Doing business is also about taking risk.
So don’t be afraid to take on new challenges and give your best shot.
Success is on its way!