Quick teaser of the visit to iCoin Summit

If there is one thing that is 100% confirmed as a fact it’s that the blockchain community is teeming with passionate individuals whose lives have changed for good after coming in contact with this new and emerging technology. Although the community is still quite small in numbers, it has become obvious that even a handful of people can have significant influence and bring about changes that positively affect the lives of everyday people. Whether or not regular folk are even aware of this, is not relevant, as I’ve yet to come across a single enthusiast who doesn’t believe that blockchain is here to stay. And it’s not because of that hyperbole either, but as a result of their intimate understanding of the potential, so naysayers just have to deal with it. As one presenter at the event very accurately pointed out: those who think it’s not possible to do it should stop interrupting the ones already doing it.

During the two days of my visit I had the privilege to talk to many of the teams representing their ideas with passion, and get a glimpse into their vision. You could hear the excitement in their voices when they rapidly delivered their pitches in an attempt to sway interest. Fear not blockchain venturists, all of your ideas were a good listen, so have more confidence in your vision. In addition to these projects, the event boasted around 30 experts from various backgrounds who delivered excellent talks and engaging panel discussions.

The goal is of this write up is to condense the up-to-date information disseminated by the experts in a way that is relevant to our own readers. So if you want to know where the winds of change are (and have been) blowing you’ve come to the right place.

Current health and effectiveness of ICOs

First some facts and figures quoted by the speakers: out of all of the ICOs launched in 2017 over 45% have failed by early 2018; from the total funds raised in 2017 roughly 37% of the investments went to a small minority of projects; the ICO investment market cap still pales in comparison to traditional fundraising activities, such as IPOs, roughly 1% of all investments were collected by blockchain projects. With that out of the way, let’s look at what exactly investors are focusing on when evaluating projects.

Investment practices and general tips:

• Tech based projects that have their MVP available for inspection e.g on GitHub, expect investors to source knowledgeable techies to investigate what progress you have made thus far and whether or not the underlying infrastructure is sound
• Founders need to be prepared to give face-to-face or video interviews and potentially provide IDs for thorough background checks to uncover for fraud, questionable track records, etc. when dealing with interested parties
• An independent 3rd party or an internal auditor will most likely comb through your whitepaper in an attempt to identify weaknesses and determine scalability
• Effectiveness of token integration in your solution and the adequacy of your due diligence in classifying your tokens correctly (utility vs. security and so on)
• The viability of bounty programs is questionable, because it is increasingly difficult to verify who exactly is obtaining your tokens, are they bots or actual community members? Should the former be true, you’re effectively wasting your tokens with no real returns
• Airdrops are a viable alternative to an ICO, but only if you first conduct a capped private round by limiting token supply to VCs, then do airdrops to generate value for your tokens by distributing them among your community
  Status of your ICO and what to focus on:

The design and functionality of your site — generates trust in your brand

• Team’s skill set and track record, relevancy of advisors — boosts trust once again
• Make media love your project — added exposure which is free in many cases
• Quality of video presentations — visuals are the strongest medium for conveying your ideas
• Necessary localizations of marketing collateral — only target geos relevant to you
• Partner lists and level of their participation in your project — show who you work with and why
• Tokenomics in detail — does it actually make sense to tokenize your idea or can you pull it off without it?
• Presence and effectiveness of community management across channels — pretty obvious, you need to look after investors and cater relevant content to them
• MVP or Alpha version of your product — people like to touch things, it gives them a sense of tangible value
• Legal base and potential risk factors — assure your investors by complying

Additional external attributes evaluated by investors:

• How much investment has already been collected
• Whether or not you reached your soft cap
• What is the hard cap and why
• Is there an escrow in place
• What sort of ratings (from native media) has the project secured
• Mass media presence and overall exposure
• Social media activity and following
• Legal propriety

Out of all of the ICO features that were discussed, there were a couple that I’d like to stress as they kept recurring across multiple topics and contexts. First of all, having an MVP or an Alpha is quickly becoming a deciding factor in who secures investments among both competing projects and unique value-propositions. As with traditional startups professional and casual investors prefer to have something that is tangible and they can get their hands on. Even better if you are able to present a successful use case or relevant data to support your business plan.

The legality of your project and ability to demonstrate due diligence generates significant trust among all parties interested in your project. Last year only around 23% of projects that entered their sale stages had successfully completed their legal due diligence on time and established themselves accordingly. You can expect the necessity of legal compliance to increase with constantly tightening regulations affecting the blockchain industry, and to be something investors will request you to have in place.

So what’s the takeaway?

Since last year when we shifted focus to the blockchain industry with our marketing efforts, evaluation criteria lists concerning ICOs have kept on growing both in size and in detail. There is a strong shift towards evaluating projects as you would in the case of traditional startups from other industries: business plan, MVP, relevant use case and supporting data, scalability. Both casual and professional investors are wisening up and putting more effort into their due diligence processes when comparing one project to the next. More and more companies that focus on scalability in particular are only willing to partner up with projects that have already successfully completed their funding rounds and are ready to take their businesses to the next level. With that in mind, it is vital for project teams to understand that the ICO process itself is merely the first step in building a sustainable business that will keep growing for years to come, AND have necessary (actionable) strategies in place.

Our team spends a lot of time developing our own competencies in order to be able to have these types of answers for those project teams that enter the scene with good intentions and viable solutions. As the intensity of competition grows, so does the need to have marketing, branding/PR, and post-ICO activities in place. Despite there being more knowledge in the market most blockchain startups still fail to secure necessary investments either because they lack in expertise, or less than ideal execution of their strategies. For those of you seeking to avoid these pitfalls we’ve already shared, and will keep on sharing information that can help you learn from others’ mistakes/successes and identify relevant best practices for your projects.

If you’re interested in learning more, I suggest you also take a look at our in-depth guidebook below or simply reach out to us and we’ll be happy to share our experiences with you.