There have been numerous successful ICOs throughout this year as more blockchain companies turn to the cryptocurrency community for investment. This has resulted in $2.3 billion being raised over the past year.
For investors, ICOs can maintain a greater ROI in a shorter time period compared with more traditional investments which means funds can be locked in equity for a number of years.
Previous successful ICOs have shown that ambitious blockchain firms can achieve their targets in fundraising through this innovative new model.
However, not all ICO campaigns are destined for success and many inexperienced firms may find that they fall into the common pitfalls that lead to a project failing. So what should you avoid when launching an ICO?
Breaking the law
It may seem obvious, but with some less than legitimate ICOs making their way to the market, organisations need to instill trust and ensure they remain legal. Throughout the process of running an ICO, the first thing which is crucial to avoid is breaking the law. When dealing with other people’s money it is recommended that you hire the services of a lawyer whilst preparing for a campaign ensuring that everything runs smoothly.
Losing trust of your audience
With the Blockchain industry being unregulated, lacking transparency and filled with various scam stories, participants are often very cautious when it comes to investing. Any signs of fraudulent activity will spark warnings or red flags for the audience.
Updating contributors on the progress, remaining genuine and constantly keeping in touch with contributors is also very important for the crowdsale campaign process.
There are many pitfalls that some inexperienced organisations may fall victim to. However, with the right guidance from professionals, they can better their chances of becoming one of the more lucrative and successful ICOs.
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