Launching a Successful ICO

How To Classify Your Token As An Asset

When considering to hold an ICO, there are two broad areas that you must first consider. Are you issuing a utility token or a security token?

  • A utility token will provide access to a product or service (Failing the Howey test)
  • A security token is an investment (passing the Howey test)

Having a clear picture of which path you will take from the start will save countless legal hours down the line.

This plays a role when promoting your token as there are many restrictions when marketing a security around the world.

ICO Private Sale & Pre-sale

These are token sale events designed to raise funds prior to the main crowd sale.

What is a Private Sale?

A Private Sale event usually consists of founders and core team members conversing with their advisors and pitching the project to crypto funds, VCs and angel investors. Institutional investors usually ask for the greatest discount, for example, they may ask for 40% if the crowd sale starts at 20%. This can be used as a means to fund the Pre Sale.

What is a Pre-Sale?

A Pre-Sale event can be used as a means to test and validate whether crowd investors will invest or not. If you reach your goal, you are ready for the real deal — a worldwide campaign. A pre-sale is also a way for projects to raise funds to cover expenses for the crowd sale.

Some ICO expenses may include:

  • Smart contract development
  • Paid Advertising (e.g. PR, social media marketing, paid advertising)
  • Recruitment
  • Hosting Events

Identifying how to approach traditional institutional investors is an essential step in obtaining this presale cash injection.

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