These are usually but not necessarily investors who can invest bigger amounts of money, can buy equity (convertible loans) instead of tokens or can join the projects as strategic partners who not only buy equity or tokens, but also provide some sort of services in the growth of the venture.
The seven major ways to seek funding in the private placement are:
Working with an agency like TSM would ensure not only confidentialty of your actions and knowledge of what works in practice, but also ensure impunity as if some information become public, such as that you are negotiating or doing business with one pool instead of other you would always have the option of saying it wasn’t you who negotiated the deal. It was TSM!
Tokens & coins value rest on the faith of people who buy them and use them. Entrepreneurs are like faith managers & with their projects they need to increase the faith that their coins are the ones that deserve the faith of the community.
Hence, there are many rules to be respected when negotiating with partners from the early private token sales onward. Here are some tips:
Here is how a successful ICO/TGE fundraising would look like:
Here are some of the early fundraising mistakes we often see:
Here are some important questions we answer for our paying private placement clients:
So, book us today and inquire into the prices and risk/rewards ratios of different fundraising techniques we have had the privilege to do for multitude of clients.
These founders are often required to assemble a team and begin their project with limited or no funding. Such entrepreneurs would be (in most cases) terribly wrong to approach a Marketing company under such conditions.
Why should they wait before seeking an agency?
Many successful ICOs have raised a lot of money without the help of a Marketing agency because they have their networks, valuable skills, and can turn to freelancing sites to source people with experience for small areas where they lack knowledge. Some reputable companies, like International Blockchain Consulting, have used freelancing platforms to find high-quality people for their operations.
ParagonCoin, which raised more than 170 million USD, also used freelancers at around $30 dollars per hour for most of its day-to-day support needs. Super angels such as Fabrice Grinda use freelancers for his venture capital firm and related research projects. Even Secretary Generals of international organizations such as Interpol use freelancing sites! So, it can be a cool place to get started.
It is fine NOT to use an agency if you can properly select freelancers and create a team with limited resources, at first. A team that fits the founders culturally and professionally can do the job very well. Such a strategy can also help founders save money on labor and find people that will stick with them after their ICO hits the softcap.
If you are a bootstrapping your way to an ICO, then you probably won’t be able to afford a real ICO agency (unless you’re already very wealthy). But don’t get discouraged if you don’t have the sometimes-stellar budget required by leading ICO agencies. With the right team, culture, and sweat equity in place, many have worked miracles. If you have what it takes, you might do so as well!
So, do NOT contact an ICO marketing agency if…
Instead of wasting your time, and some agency’s time as well, you should work towards creating a compelling pitch of your project idea and yourself. Dig into your LinkedIn and alumni networks, turn to pitch-promising wantrepreneurs at universities, and join freelancing sites to assemble a cost-effective team that is good enough to get you started.
Agencies are built from people who produce more value together in synergy than individually. They are comprised of imperfect individuals striving for a perfect whole. That is why many agencies charge premiums, as they believe they’re offering more than any individual by themselves.
Agencies are also more required to abide by local and international laws. They have databases, networks, memberships in prestigious organizations, collective know-how that surpasses that of freelancing individuals, and setup procedures to optimize productivity and results (capitalist vaulters!). The only real issue is that they cost more!
That is the reason why bigger companies and high net-worth individuals (HNWI) who are doing ICOs usually contact agencies rather than freelancers. It saves time, guarantees higher quality, and allows usage of proprietary know-how, know-who, and tech. Also, they can rely on legal responsibilities if they want to deduct the investment expenses from their taxes, for example. All these factors make the choice of an agency more convenient for them.
So, when you should hire an ICO agency?
There is also a third option. You can download Telegram and join any open groups where you can ask for ICO services. This will result in hundreds of offers coming your way from entities that are half agencies, half freelancers, or some percentage of the two combined. Close your eyes, give it some thought and choose the ones that you think are best. This might be a question of luck! Beware of Telegram offers, however, as half of them (especially the YouTube reviews) are probably scams!
If they are so different, will Blockchain “companies” grow faster? Not if they do not ditch their socialists models.
The global nature of the blockchain markets and its democratic openness towards almost every investor who makes her own decisions without the need to move to New York or Singapore to be in the center of the investment frenzy, has attracted many individuals from all parts of the planet.
The minimal investment amounts of 1 USD or less on some ICOs, have made the market open for people with smaller incomes. Is it better for those investors to spend money in casinos, or on innovative projects that might change the world?
However, the core morals of blockchain seem to be working against it in the long run regarding the speed of the growth of the token economies. The unique cultural essence of blockchain start-ups that are giving a lot to investors inhibits their growth. The reason is that many blockchain start-ups, blinded by the spirit of the community have become socialist self-management communes without the libertarian part! Capitalism knows private incentive and rewards founders with salaries, not just equity. In the case of the blockchain, the majority of teams only get tokens as compensation.
Imagine if companies from the old conventional economy just gave shares to the management team instead of salaries they can use to buy goods with, and only give those shares in the first years of business. Then, the only way for founders to survive and still work on their blockchain start-up is to sale part of their stakes (tokens) in the companies to whose growth they need to contribute. Would founders be more motivated if they own fewer shares in their companies? Of course not!
Thus, the one minor obstacle to the better growth of most blockchain companies is the inability or reclusiveness of many founders and blockchain investors towards the imposing of code that is rewarding the team on a monthly or annual basis indefinitely or while they serve the blockchain smart contract development. The community can also participate in establishing these rewards with smart contracts and voting, but rewards from which founders can live conformably have to exist nevertheless, to prevent the team to sell its tokens that should serve as a motivation to grow the economy to the benefit of all participants.
So, in order for the blockchain revolution to work, founders need to be rewarded properly at least to the level of successful founders in the conventional economy. Less socialism, more libertarianism!
From a guy who helped founders raise more than $280 million
*there is a difference between a coin and a token. For the sake of simplicity we would use the term “coin” instead of token onward
Why will ICOs rule or NOT rule the world
*How to Initial Coin Offerings raise millions without giving equity?
There are more ways this is done usually, as coins or tokens can be different from one another, but here is one standard way. The coins offered are for a certain utility or something that will be automated and that the users can access. Think of medical records that are accessed via a blockchain making sure they are protected and accessible globally at the same time. Every time someone uses this medical blockchain network, she or he needs to buy the coin that allows this network to function. The more people use the network the more its coin value increases.
The reason why when more people access their medical files on the network the more value of its digital coins increases is that they also exist in limited quantities! Hence, there are capital gains for investors just like with stocks. For coins usually there is no interest or dividends, just ownership of the currency used in a small economy. Companies can still take fiat dollars and euros for providing services of their network, but usually they need to convert them to their coins/tokens! Once they do, the value of the tokens increases!
Case study example
Here is how a medical chain blockchain database startup raised money.
The startup sold 30,000,000 coins at an average price of 0.8 USD per coin.
First, they sold at a discount of 40% in the private placement and the first week of the pre-ICO that was opened only to whitelisted investors who could invest at least $20,000. Then, they sold the tokens at a discount that was decreasing with every stage of the initial coin offering while reinvesting part of the money into marketing!
So, if they gave 20% discount on average, does this mean that the cost of capital was 20% too? I don’t think so! No. The blockchain venture got fiat money in return or around 24 million USD! Given they did not give high cash rebates but only token discounts, they cash COC for the fiat part were below 5%. The token discount was around 20%.
However, once they listed on exchanges the price of their token was already 20% above the highest selling price in the ICO! So, imagine that. The company did not raise just $24 million USD – < 5% discount. It also got 30% of the tokens in circulation and 20% of tokens for the founders valued at about another $14 million USD! Additionally, half of the buyers of their tokens were considered future users of the platform and not speculators.
The total cash investment of this amazing team? Around 40,000 USD! However, they were high-quality founders which is sometimes awesome.