How does an ICO make money? That is a very common question for those who are thinking about starting an Initial Coin Offering.
This alternative funding mechanism is a great way for small companies and startups to raise money without having to ask for a bank loan, for example.
To answer the question in a very simple way, an ICO is just like a crowdfunding, so it makes money by raising funds from people who believe and want to invest in a project or company. And, in return, the investors get an amount of token proportional to the money they invested.
Now you must be thinking about how the whole ICO process works, right? To start, needless to say, there must exist an idea or strong idea and plan to be executed that can catch the eye of potential investors.
After that, these are the phases of an ICO launching:
Ideation & Whitepaper Creation - Every ICO has to have a Whitepaper. A document where the company explain all about their project, what problems they want to solve and how much they are aiming to raise. In summary, the whitepaper has to explain everything about the project.
Pre-ICO Marketing - You’ve got a solid idea and the whitepaper is ready, explaining everything the potential investors need to know. Now is time for a pre-marketing, to get a high the buzz around your coin.
Initial Coin Offering - The marketing went well and lots of people are interested in investing in your company, so it’s time to open sales and start raising funds.
Wallet Setup & Coin Drop - The sales are over and you raised the desired amount of investment for the project. Now is time to issuance the coins and set up individual wallets for the investors.successful
That is the basics of how an ICO launching happens. And if you are thinking about having your own Initial Coin Offering, talk to Blockchain App Factory. We offer complete services to make your blockchain venture successful.