With the outburst popularity of blockchain technology, emerging companies are moving toward it. However, the path contains various obstacles. One of the primary needs for a blockchain startup will be financial aid. Not all of them will have enough money to start and establish their own company. Also, blockchain is new here, so finding the right investors will be challenging.
Fundraising For Blockchain Projects
Crowdfunding might be a good choice for a budding blockchain and crypto-based enterprise. In this digital era, we can even collect digital funds using cryptocurrency. ICO, IPO, ILO, and IDO are some of the types of crypto crowdfunding. In this blog, we will be talking about Initial Coin Offering (ICO) in detail.
Before that, the launchpad is an essential part of crypto fundraising. Emerging blockchain crypto-based projects should acquire the best launchpad development services to make their crowdfunding campaign successful.
ICO: Booming crowdfunding method
Initial Coin Offering is similar to our real-world stocks. In this method, blockchain and crypto entrepreneurs will get direct contact with investors. The ICO trading platform will have numerous blockchain project ideas from various blockchain enterprises worldwide.
An investor will give popular crypto like BTC and ETH in exchange for the crypto developed by the entrepreneur. This will give a chance for investors to have exclusive features in the project they invest in.
First Step: Project Whitepaper
Investors can request the project’s whitepaper to decide whether to invest in it or not. A whitepaper will have information written below.
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Objective and scope of the project
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Initial capital required to start the project
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Project team information
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ICO campaign duration
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Amount of tokens investors will get
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Type of crypto the entrepreneurs will get
If the project whitepaper seems shady, then the investors can step back from it. Thus, the whitepaper should gain the trust of the investors.
Types Of ICO tokens
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Utility token
These tokens are more like pre-ordering a product. Utility tokens will not give a share in the company but in its project. Investors can use these tokens to access the ICO product post-launch.
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Reward token
The purpose of reward tokens is to symbolize the recipient’s reputation, relying on the positive impact they create on the blockchain. Also, one cannot trade these reward tokens.
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Asset token
Asset tokens are becoming popular in recent times. The original value of the physical asset linked with the token will represent its digital value.
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Equity token
Investors with this token will actually become the partners of the project. They will participate in the decision-making processes too. So, when they buy an equity token, they will get the right to some portions of the blockchain project.
Even though ICO helps raise funds and get more investors, you should be considerate about the launchpad it is listed in. So, you should choose a dedicated launchpad development company to have your own trustworthy launchpad to raise funds.
