ICO (Initial Coin Offering) has become number one method to raise funds for many start ups. The benefits compared to traditional seed rounds are undeniable, however ICO is not for everyone. You should think of starting an ICO if:
1. Your project utilizes blockchain in a new way.
ICOs that are not related to blockchain usually do not do well, however in case you have strong business foundation behind your ICO you may succeed.
2. Have $100k for launching your ICO.
$10k will go into tech development and white paper, some will go to salaries and over half of it should into marketing. As marketing is the key to successful ICO.
Keep in mind that the $100k does not include the development of your actual product. For that you need to reserve money separately, or use the funds you will raise, as many do.
3. You plan to make public fundraising.
If you want just to create your ICO and sit and wait for big investors, it will not happen. ICO is all about public fundraising, and even big investors will appear after you have created a hype around your project.
4. You are in B2C (business to consumer) business.
In order to have successful public fundraising and hype the product has to be appealing to consumers. B2B (business to business) or B2A (business to administration) products don’t do so well as ICOs, however there are exceptions.
5. You plan to be transparent.
ICO is all about transparency. If you plan to hide your business plan, half of your team or how much money you have raised you have no business in ICO industry.
6. Your business is not a charity.
Charity is not for ICO. While you may receive donation in crypto currency for your charity, doing an ICO for your charity is just stupid.