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Due to the declining popularity of Initial Coin Offerings (ICOs), would-be investors in cryptocurrencies and blockchain projects that are wanting to raise funds for their endeavors have been turning to the more rigid Security Token Offerings (STOs) due to their increased security and the fact that they align with SEC regulations. This is much to the annoyance of many members of the crypto community, who believe that STOs are counterproductive to the point of token offerings, which is to allow crowdfunding without numerous barriers.
In contrast to the recent trend towards STOs, there has been another method of fundraising which is starting to gain popularity in the crypto community. This new method is called an Initial Exchange Offering (IEO). If you are not currently familiar with what an IEO is, we would recommend checking out our article What is an Initial Exchange Offering (IEO)?
If you are still reading at this point, then it is clear that you are thinking about launching your own IEO and want to have information on things to consider before you dive in. Thankfully, we will be going through a number of different factors which will help to increase your chances of successfully launching your IEO.
Ensure Your Documents and Business Plan are Sound
Generally speaking, a blockchain project’s whitepaper is written and developed by the project team.
This isn’t a bad thing, after all, nobody will know how to articulate the benefits of your project better than you would. Although, a number of projects fall down by only allowing themselves to view the whitepaper draft before making it go live.
To ensure that your whitepaper is up to scratch, you should consult with external professionals in the cryptocurrency market who will help you to make amendments and outright changes to your whitepaper, to ensure that people view your project in a positive light.
This doesn’t just extend to your whitepaper though, this can apply to any official documentation and press releases that you would put out.
With regards to the whitepaper, things that normally need to be checked include the technical aspects of the project, how your token is going to work, project structure, etc.
Cryptocurrency exchanges are likely to put your project through a very rigorous due diligence process before accepting you for an IEO.
The reason for this is that the exchanges open themselves up to a lot of exposure by launching and advocating projects through their launchpads, if they think your project is likely to go bust, or worse, if they think it is a scam, it is very unlikely that they will risk their reputation with their customers just to host your project.
As a result of this, it is once again stressed that your whitepaper, one-pager, company website, social media presence, and pitch deck should all be of very high quality before you try to secure an IEO.
Below, you will find a list of the main things that you should have in order before pitching for an IEO:
- A Breakdown of Your Team
- How the Project’s Financial Model Works
- A Competent Team
- A Thorough and Clear Explanation of How your Model Will Work
- Your Target Market
- A List of your Competitors and Risks to your Project.
If you are looking to engage with a cryptocurrency exchange to launch your token, you will be forgiven if you believe that you will not have to put that much effort into marketing your project, as being hosted on the exchange will provide ample exposure on its own. Despite this, it is still recommended that you strongly invest in your marketing pre-IEO.
The reason for this is that most exchanges currently have very limited slots available to offer to different cryptocurrency projects. As IEOs are becoming more popular, the competition for these spaces is starting to become much more fierce, decreasing the chances of you being the one to be selected by a strong exchange.
As a result of this, it is best to be as prepared as possible before reaching out to a launchpad. If they can see that you have put substantial effort into your marketing with good results, you are much more likely to be considered for an IEO as they will believe that your project has a much higher chance of success than a project that has done no marketing at all. The exchanges are putting their own reputation on the line to launch their IEOs and they want the project that is least likely to make them look bad and the most likely to make them look good.
There are a number of different avenues to consider when marketing your project, at GuerillaBuzz, we’ll be able to help you with all of them.
IEO PR is one of the best ways to get information about your project out into the crypto world, it also allows others to take notice of your expertise, meaning in future, they will view you and your project as trustworthy and likely to succeed.
Some of the best ways to engage in PR for your project is to create and write guest posts on a number of media outlets related to the crypto community. This doesn’t necessarily have to be about your product, you should be spreading knowledge and value with each post that you make, if you do happen to mention your project whilst doing this then that’s a bonus.
An ideal way to frame this would be to write a guest post about the problems that your project is planning to solve, explaining why they are a huge issue for the crypto community and presenting your project as the solution to that problem.
This will help to generate interest and a buzz around what you are doing and by the time you come to pitching for an IEO, there will already be publications about your project that are garnering interest, leading to an increased chance of you being picked up by an exchange.
If you don’t have the time to do this yourself, you should think about passing the responsibility to an expert crypto marketing company, like us.
Some examples of outlets that you can guest post on are below:-
Another great, lost cost method of marketing your project to the masses can be found in social media. Almost everybody uses social media these days and certain platforms such as Reddit and Medium are natural hotbeds for cryptocurrency enthusiasts, along with LinkedIn.
It is recommended that you start building up your presence on social media long before you plan to launch under an IEO, keeping your community aware of any noteworthy developments so that you can maintain the buzz that will be surrounding your project. Furthermore, social media is the best way to connect with like-minded, influential individuals who may be able to plug your project and increase the number of people visiting your pages.
The best way to build an audience on social media is to get involved in community discussions by adding valuable insight and opinions, this will naturally cause people to follow you and eventually you’ll find that a lot of your followers are likely to be interested in your project. This will put you in a stronger position to launch under an IEO.
The Legal Side
A majority of the exchanges that are offering IEO launchpads will require you to undergo some legal checks to ensure that your token is, in fact, a Utility Token among other checks. Furthermore, different exchanges may have a different process and requirements for you.
To avoid any potential roadblocks when you are in talks with your chosen exchanges, you should refer to your own legal advisors who can give you concrete legal information about the state of your token. The more exchanges you apply to, the more you will have to go through this process and you will have to deal with their team of lawyers to make sure that your project complies with their own guidelines.
Choosing Your Exchange
Once you have done all of the necessary marketing, audited your whitepaper and evaluated your business plan to perfection, it is now the time for you to make your decision on the exchange that you will be using to launch your IEO, now that you have the highest chance of success.
There are a number of factors to consider when you are launching your IEO. Firstly, you want to try and get a relationship with the largest exchange possible.
This is because you want to make sure that your project is being viewed by the maximum number of people possible, this way, you are more likely to get a large number of buyers and sell out of your tokens, allowing you to reach your fundraising goal.
For example, the Binance IEO platform, by the well-known and popular crypto exchange Binance, managed to sell out their first IEO for BitTorrent in a matter of minutes, raising $7.2 Million.
It might not always be possible to get hosted by the largest exchanges and to make sure that you end up with an IEO, it is best to pitch your project to a large number of different launchpads.
You can find a list of different cryptocurrency exchanges below:
- Binance Launchpad
- Huobi Prime
- OKEx Jumpstart
- Coineal Launchpad
- ZBG Launchpad
- BW Launchpad
- BGOGO Apollo
- IDAX Foundation
- BitMax Launchpad
- Bittrex International
- Probit Launchpad
- Latoken Launchpad
- Kucoin Spotlight
- Exmarkets Launchpad
The most important thing when deciding on your exchange is to also ensure that the exchange you are dealing with is reputable. You should analyze the news in the crypto community to see if the exchanges are involved in any controversy, this way, you can avoid a platform that may indirectly cause problems for your project.
Another factor to consider is that by talking to the various exchanges, you will get an understanding of which exchange you believe would be able to help your project the most, you should always prioritize the best possible working relationship over the biggest name.
Deciding to launch your token through an IEO, rather than an ICO or STO definitely has its benefits. Your customers will have the added relief of knowing that you are going to be a legitimate organization and you will not have to jump through too many hoops to begin your sale. In contrast to ICOs, which are notorious for scams and STOs which are seen as too regulated.
There are a number of things that you will have to consider about your project and you may have to do additional work to get an exchange to agree to work with you, however, if you can get an exchange to work with you; you’re winning. If you are on a more popular exchange and have a great product, with good marketing, your offering is likely to sell out incredibly quickly.
Feature image by noodle kimm on Unsplash