ICOs (Initial Coin Offering) in Singapore
While companies looking to raise funds would typically seek financial support from outside investors in exchange for equity, more and more companies are starting to consider an initial coin offering (ICO).
What is an ICO?
A growing number of today’s businesses and startups looking to raise money to get their industry-disruptive ideas off the ground are embracing the promising claims and lucrative advantages that an initial coin offering (ICO) can provide them.
Simply put, an ICO is the equivalent of an IPO in the mainstream investment world played and transacted in the blockchain or cryptocurrency platform.
The basic ICO process
- Ideation
ICOs basically begins with an idea. This could be any concept for a blockchain-related project that a company would like to pursue and would like to propose to the community.
- Whitepaper
When the startup finds traction with the concept, they proceed with drafting a white paper that outlines all the details of the project—from its goals and objectives to how much initial funding or capital it needs to raise, from the team working behind the project to its technical aspects, and all other information necessary to help investors come to an informed decision on whether to participate or not.
- The token sale
Once the white paper is put together, marketing campaigns are then launched and an ICO date is scheduled when the token sale is set to begin. Normally, a given time period for the sale start and closing is defined for raising the required funds.
Once an investor decides to put money on the project, he will be awarded the project’s cryptocurrency (in the form of tokens) in exchange for making an investment. Depending on the nature of the project and arrangements made, tokens can be bought in exchange for other cryptocurrencies or for ‘real’ fiat money, including U.S. dollars, euros, and others.
Preparation before launching ICOs
ICOs are capable of producing huge returns on the investment. So how exactly does one go about launching an ICO? Here are the essentials every startup should be aware of and understand:
- Get started with the basics. Build a powerful white paper that clearly explains the problem you’re looking to provide the solution for, the reason why your solution will work, and the reason you need the funding. Calculate the critical values of your chosen token to use and get a lawyer on board to help you with the legal technicalities, among others.
- Carry out the groundwork. Weigh your options on the token technology that you will implement for your ICO. Depending on the structure that you want for issuing your tokens, you will have to decide which platform to use. Here you need to research on the countries that actually allow investments into ICOs and puts ICOs in a positive light and be biased toward working with them.
- Gear up for launch. Procure a multi-signature wallet, set up the nodes and the necessary hardware for your chosen ledger technology, and put up the website for the ICO. Assemble a top-notch marketing team to optimize awareness online and offline about the ICO, ensuring marketing campaigns reach the furthest and widest across your targeted audience of investors.
