There is a common view among ICO projects that in order to attract investments, the project must include participation from funds. Ruslan Kamensky, the CEO of Genesis Vision, a platform that successfully raised $3 million, believes that this is a major misconception in the market.
Consultants, and often project organizers themselves, often name participation from funds as the key to the success of any ICO. When we started thinking about attracting investments, we, too, held that belief and negotiated with major funds.
Our project, Genesis Vision, is a platform for private trust management that unites stock markets, traders, and investors into a single ecosystem, where profits are distributed automatically among the participants. Decentralization is a key feature that we wanted to ensure within the system.
In analyzing our idea and the terms we were discussing with funds, we realized that in our specific case the participation of funds in our ICO would do more harm than good. It’s true that it would certainly have allowed us to raise more money. But it’s worth remembering that no fund would join the project on the same terms as everyone else. Funds would want to join in the early stages and reap large bonuses. That would result in ICO participants receiving huge quantities of tokens at a low price, which would have a negative effect on the token price and the project’s ecosystem as a whole.
The idea that attracting funds is necessary is simply the result of common practice. In the not-so-distant past, in order to attract any funding at all for a project, you would have had to go around to venture capital funds, hat in hand. And only a few of them might have agreed, after lots of persuasion, but, as I said earlier, not on the same terms as everyone else.
Having rejected funds and in the almost complete absence of advertising due to our company’s Adwords account being blocked as a result of phishing attacks, we were able to raise the amount we wanted by relying on our personal connections in the cryptocurrency world, our well-developed and active community, and PR.
My advice for those looking to launch ICOs is simple.
- Evaluate your idea. Investors must understand the purpose of conducting the ICO and the need for your token to be issued.
- Be transparent. Enter into honest dialog with potential investors, as that forms the foundation for future partnership.
- Work out your development plan in detail and share it with your audience.
If you are creating a decentralized system, be as open as possible, since transparency is what we are working toward.