IEOs: Prospects, Challenges, and Solutions
The rising concerns about Initial Coin Offering (ICOs) have led to the popularity of another related concept, which is termed as an Initial Exchange Offering (IEOs). Both these terms sound similar, although these are quite different from each other, especially in terms of their operating methodology. Unlike ICOs, IEOs are administered by an exchange which takes care of the various concerns related to safety and security of the investment. In fact, this added safety and security is one of the prime reasons behind the popularity of IEOs. Another reason fueling the prospects of IEOs in the market is that it brings benefits for all the stakeholders involved in the process – the company which is looking to raise funds through IEO, the investors, and the exchange which administer the whole process.
The process of bringing IEOs to the market can be divided into three steps: preparing the application for IEOs, selecting the right kind of exchange, and promoting your IEOs through the right mix of communication platforms. All these three steps are essential in making your IEOs successful and hence require careful planning and implementation while taking into account the nuances related to each of the processes.
If you are looking for a reliable firm to take care of all these necessities on your part, Blackchain International Ltd can be a perfect choice. It is an international STO/ICO/IEO consulting, promotion and fundraising firm working dedicatedly with 10 out of 15 most highly regarded IEO platforms. The Blackchain team led by Eloisa Marchesoni, Giacomo Arcaro, and Giovanni Casagrande has a tremendous track record of turning projects from all around the world from just good to incredible!
Following are some of the important recommendations that you must include in your IEO in order to ensure that the offer gets the right kind of response from investors.
1) Recommendations for Successful IEOs: The most important recommendation is to present the investors with the minimum viable product (MVP) or the product prototype that will help them to understand clearly the mission and objective of your efforts behind raising funds through IEO. Even in the crypto space where technology reigns supreme, you have to present something tangible to encourage people to invest in your business.
2) Multi-level IEOs: It is increasingly becoming difficult for the businesses to raise large hard cap through IEOs as the number of companies taking this route is on the rise. Therefore, it is a very real possibility that you may not be able to reach the desired funding level at the first go. In order to tackle this issue, one should be prepared to go through multiple rounds of IEOs rather than depending on one stage only. Combining different levels and rounds will involve some private funding while multiple IEOs will help you reach the desired target. That’s not to say that achieving the large funding through a single IEO round is impossible, but having something to fall back upon in terms of multiple-round is certainly a good idea.
3) Promotion by Teaser: A brief, one-page teaser describing highlights of your product/services in an attractive manner to catch the imagination of investors. Make sure you include all the unique selling propositions of your project that will positively influence the people to participate in your project.
4) Use Pitch Deck (PD): A more comprehensive and detailed method to impress upon the investors is the Pitch Deck (PD). PD is essentially a brief presentation about the project, a way to monetize it, and introducing your core team to investors. It is going to lend credibility in terms of defining the scope of the project while describing the implementation route that you are likely to follow.
5) White Paper: Releasing a White Paper about the project is also a credible measure to raise the popularity of your project. Among other things, you should focus on including the business plan in the white paper. A business plan is a detailed document having information on all the important aspects related to the project and its main constituents include an executive summary, description of the company and management, analysis of marketing and sales, description of product and services, and above all, a request for the funding meted out to all the potential investors. The financial projection is one of the key components of white paper which will be under the heavy scrutiny of investors. Every calculation that becomes part of the financial projection will be heavily dissected and anchored on the various kinds of feasibility aspects. It is only after potential investors are quite satisfied with your financial numbers you can expect a good funding response from the investor market.
The analysis of the token model is also important as it describes the life cycle of a token and how the project aims to create a whole ecosystem around it. Tokenomics is quite a popular term and helps the investors to understand the important processes like raising the capital, regulatory concerns, the monetary policy and its consequences, and various legal aspects related to the project. The focus of this analysis model is to illustrate the various facts through charts, graphs, and figures to make it easy for investors to understand the whole concept. Given the diverse nature of cryptocurrency exchanges, there is a possibility that the project needs to make a legal assessment of their token sale. It is also important to understand that regulatory mechanisms differ from country to country, and hence, it is incumbent on you to take full care after the legal and regulatory environment for smooth conduct of the IEOs.
Approach the Exchange: Approaching the exchange to accept IEO and put it on the public domain is also a challenging task. As mentioned before, different exchanges have different rules and regulations, and hence, the way you should approach one exchange might not be the ideal way to approach another exchange. One of the ways to approach an exchange is to present your proposal through agencies and partners working with a particular exchange. It is not a sure shot way to enter into the system; still, it is a good starting point to establish communication with an exchange. The attractiveness of a cryptocurrency exchange depends upon many factors with the prominent ones being user-base size, history of the exchange in hosting IEOs, and more importantly, what has been the net increase in the value of tokens issued by the exchange during the previous IEOs.
Strong Marketing is the key: This statement is especially relevant in today’s day and age when the competition is on the rise as we have witnessed a sporadic increase in a number of the IEOs. In such a scenario, it is absolutely mandatory to reach out to the investor in a desirable manner with all the specific details of the project. This will help the company to win over the trust of investors and make their IEOs successful in the market.