The guide provides information on a Direct Public Offering (DPO) – a type of offering in which a company offers its securities dir...
Once you understand the advantages offered by Initial Exchange Offering, you need to know how to launch IEO and the key to the successful IEO.
IEOs bring multiple benefits to investors. The main idea behind introducing IEO is to make crowdfunding reliable and secure. Exchanges monitor the investment process and therefore, investors don’t need to worry if the team behind the project will run away with the money and corrupt the operation.
Exchanges have to maintain their reputation and so, they research the company and ensures that the project is valid and valuable. It brings trust among the investors.
Due to the reliable exchange platform, it considerably takes leed time to be established and recognized. An exchange itself promotes and supports your project, thereby reducing the marketing efforts. Since exchange platforms have an active user base, it will ease the way to enter a new marketplace.
Also, it is the exchange platform that handles the KYC/AML process to meet the legal regulations. As a result, you can always emphasize on the execution of the project rather than focusing on other activities.
The exchange platform aims to run your project and keep the clients satisfied. It is the reason why the platform creates a marketing strategy and gives the benefits of saved costs and enables the project to enter the market faster.
Also, exchange platforms maintain smart contracts of Initial Exchange Offering and there’s no link between smart contracts and the project’s team. Therefore, the project stays protected from corruption, thefts and any investment attacks.
Projects are aimed at crowdfunding to finance a project. However, various projects fail even before they start making investments. With IEO, exchanges can ease the search of potential investors by bringing their token-holders.
Getting listed on the exchange platform instead of your own platform can benefit the project in many ways.
In the preparation stage, you need to come up with an idea for your project and ensure its feasibility. It is essential that you should be aware of the market requirements and needs.
Do the competitor analysis and find how your project could be better than that of the competitor. Ensure why would investors want to put their capital to buy your token. Also, the project should look legitimate to obtain a listing on the exchange platform successfully.
The right approach for a successful IEO is research IEO projects that have achieved success and it will help you prevent the risk of failures.
You should have the support of a strong team that has qualified experts who know blockchain space and crowdfunding mechanisms. You need to have a team of experts from various fields to launch IEO successfully.
Unlike ICOs, you should have some progress underway in terms of development or MVP in order to get placed on the exchange platform.
In Pre-IEO stage, you need to choose the exchange platform where you want to get your token listed and traded. Ensure to look at their selection criteria as the exchange platforms perform due diligence for the projects to gain investor’s attention.
Some of the popular exchange platforms are Binance, Bittrex, Huobi Prime, OKEx and Kucoin.
Binance is one of the first exchange platforms, recognized as the world’s largest exchange with high trading volume. Looking at its model, other exchanges also copied it and came up with a similar platform.
BitTorrent launched its IEO on the Binance Exchange Platform and reached the cap in less than 15minutes. One of the IEO projects, Fetch.AI could sell their tokens during IEO within only 22 seconds.
These platforms helped companies achieve cap within a matter of seconds and minutes. Once the project gets approved for listing on the exchange platform, the next step is to draft a whitepaper that explains your idea and strategy to launch an IEO.
The whitepaper can help investors make investment-related decisions. Make sure you add the token sales summary sheet in the whitepaper to make the targeted audience aware of the investment plan.
You should also have a website that introduces your project to future contributors. Developing a website for IEO will not be expensive as compared to STOs or ICOs as you don’t need to integrate AML/KYC mechanism. Investors will visit your website to know the status of the blockchain app or get the token info.
IEO is a core stage where you create a funding goal for tokens that will go to IEO sale. Create an appropriate hard cap for funding to ensure investors that the goal is practical and tangible.
After the tokens are minted and a funding goal is decided, list them on exchange platforms and start earning a profit.
Once the tokens are successfully listed on the exchange, there is a need to market and promote it to gain traction. You can promote the IEO project by running marketing activities like Social Media Marketing, Blog Writing and SEO, Press Release and Outreach and Commenting on related forums.
IEOs are emerging at a rapid pace because it involves the exchange platform as a counterparty who is responsible for managing all the funding activities. Anyway, if you are looking to launch an IEO, you may always consult Initial Exchange Offering experts, who have a strategic partnership with the reputed exchange platforms and can help you achieve the funding goals within a few minutes.
*This guide was developed in partnership with LeewayHertz – an award-winning software development company using emerging technology for startups and enterprises.