If considering crowdfunding with cryptocurrency, you should know the basics!
Rocket by Etherparty is a user-friendly token creator that simplifies the crowdfunding process by letting you set-up, launch and track your token crowdsale without a development team.
If you’re relatively new to blockchain technology, the world of token crowdsales can seem bewildering.
The number of token crowdsales are continually increasing and venture capitalists are pouring more money into early-stage blockchain companies than ever before. According to Fortune magazine, in the first half of 2018, VCs exceeded the prior year’s funding to blockchain companies by $1.4 billion.
If you’re considering a token crowdsale to find contributors for your startup, you need to understand the basics and make sure you have the time, skills and knowledge to run a successful crowdsale campaign.
The Building Blocks of Blockchain
First of all, consider whether you will actually benefit from blockchain technology. A blockchain is a digital, decentralized public ledger where transactions are recorded and confirmed anonymously. Data is immutable, and currently, the technology is used to verify transactions of cryptocurrency, such as on Bitcoin’s or Ethereum’s network.
Where it gets interesting for startups is the untapped potential of blockchain technology adaptations that go beyond cryptocurrency transactions. More companies are betting on blockchain for use in industries and everyday applications, from data storage to executing contracts, and beyond.
Is Your Project the Right Fit?
If you think blockchain will further your project, then a token crowdsale may be useful. Creating and launching a token to crowdfund for your project will give you access to a global network of peers eager to see you succeed. But it also involves a lot of preparation.
Potential contributors will have a lot of questions. They will want to understand the problem you are trying to solve, how blockchain will be used to solve it, the characteristics of your token and how it can be used, who is involved, and the future roadmap of your project.
If you honestly can’t answer how blockchain technology will benefit your project, then a token crowdsale may not be the best option.
Finding the Time and Skills to Launch a Digital Token
If you decide to go ahead with your token crowdsale, there’s a lot to consider:
- What’s the market like? Consider the strengths, weaknesses, opportunities and threats for your project through a SWOT analysis.
- Do you know how to create an Ethereum token and smart contract? The token is essential, while the smart contract is required to tell a token how to react in certain situations.
- What are your crowdfunding goals? Consider what you want to achieve with your crowdfunding campaign: for example, the date you will launch and whether you will put a cap on the number of available tokens.
- Do you have the right skills to develop a project prototype and promote your crowdsale? Most successful campaigns involve a team of experts and advisors. But it’s not enough to just develop your project — you need to be able to market it. This means thinking beyond engineering to include marketing, PR and social media, web developers, designers and translators for specific foreign markets, for example.
- Do you have enough cash flow for at least six months, including three months before the token crowdsale? You’ll use this time to develop a website, white paper, build a community, answer questions and market your project. During and after the crowdsale, you’ll need to be available to track your token, provide support to contributors and implement your plans.
- Have you sought legal advice? It’s essential to understand the characteristics of your token, which jurisdictions apply, and how it will be regulated.
Don’t Want to Do it Alone?
If you’re looking at the list above and wondering how you’ll find the time or funds to navigate the complicated waters of cryptocurrency-based crowdfunding, you may want to consider a packaged solution.
Unlike a haphazard DIY approach, pre-packaged software can give you a comprehensive solution for creating, launching and tracking your token.
Rocket by Etherparty is a user-friendly token creator that simplifies the crowdfunding process by letting you set-up, launch and track your token crowdsale without a development team. This comprehensive, bundled solution includes secure token and crowdsale creation smart contracts, and a marketing page for contributors to directly support your project, among other key features.
Expert consultation and support is available throughout the entire crowdfunding process, ensuring you make the right decisions from pre-launch through to the end of your token crowdsale.
Sign-up for an account at rocket.etherparty.com and receive exclusive product updates, free guides to launching token crowdsales, and other helpful information to secure the funding goals of your project.