Blockchain is a prominent and trending technology right now. Many crypto startups and business-class people are implementing this technology for different purposes. Because blockchain technology provides various beneficial elements like high-end security, privacy, transparency, trust, and more. That’s many major and prominent sectors like banking, insurance, healthcare, finance, etc using blockchain technology. This technology is also applicable in crowdfunding platforms for raising funds in a risk-free manner. In the blockchain industry, there are three main types of crypto crowdfunding models such as ICO, IEO, and STO. In that ICO crowdfunding is a popular model among startups and investors. You can create a Crowdfunding ICO platform for your business.
If you have an idea for a crypto business or trying to expand your small business, then it is kind of challenging to get the required funds. That’s where the Crowdfunding ICO platform comes into the picture. In ICO, startups will introduce their new token with a proper whitepaper for raising funds effectively. Companies will create a crypto token for different purposes. The initial coin offering business model allows startups to sell the newly launched crypto tokens before the company launches as a means of fundraising. Therefore, startups can raise a large amount of seed capital from individual investors and many other individuals.
In the blockchain industry, there are many crypto-related business models for reaping profits. But we believe that the ICO crypto crowdfunding business model is the best one for early-stage fundraising. Besides, we also believe that ICO platforms are not right for every business. You need to choose whether ICO is suitable for your business or not.
In this article, let us discuss about how to raise funds through ICO and how ICO differs from traditional fundraising strategies.
Let us quickly start this article with…
Overview of ICO
ICO stands for Initial Coin Offering which is a well-known crypto crowdfunding model in the blockchain space. Besides, it is also one of the best blockchain business models in the market to yield a good amount of profits and gain popularity in the global marketplace. ICO funding model helped many budding startups and companies to raise funds in a hassle-free way. Initial Coin Offering is recognized as the simplest crypto crowdfunding model in the crypto space and many used this strategy for funding.
ICO is far similar to Initial Public offerings for a stock. The only major difference is cryptocurrency. In IPO, investors use their fiat currencies but in ICO, we would use crypto coins like bitcoin, Ethereum, or any other digital coins to buy tokens. In simple words, ICO is a token sale or crowd sales platform where all the newly launching crypto tokens will be sold to various crypto investors across the globe. As previously said, the ICO funding model allows big companies to raise funds. They raise funds by releasing digital currency to interested investors in the form of a new blockchain-powered crypto token.
Therefore, an ICO funding model can be an effective way to raise capital for kickstarting your crypto or blockchain business. But you need to build a strong community and must have a technical expert team who can foresight regulatory compliance. If you are willing to raise funds through the ICO Development, then the payoff can be significant. ICO funding model not only helps in raising funds but also in establishing a strong community of supporters for your project idea.
Successful ICO Projects in the Blockchain Industry
In 2017, ICO became more familiar and prominent among many investors and startups globally. Also, at that time all crypto prices reached the highest peak in the crypto marketplace. In 2018, the initial coin offering market generated more than $22 billion which challenged the traditional ways of raising funds. In the second quarter of 2018, ICO projects raised more than $9 billion which is equal to 56% of the United States IPO market and 39% of the United States venture capital. As of now, there are many ICO projects in existence and a few of them are in the development stage. In the blockchain industry, some of the successful ICO projects have raised billions of dollars for their crypto business. As there are many ICO projects in the market but only a few attracted many users from all parts of the world.
Here we list some of the top ICO projects that are prominent in the blockchain space.
- Ethereum
- EOS
- Tezos
- Stellar
- VeChain
- Stratis
- IOTA
- EOS
- NXT
- NEO
Reason Behind the Success of Crowdfunding ICO Platform
We know that crypto crowdfunding ICO Platform strategies have been prevalent for startups all the time. A good project idea allows for receiving millions of dollars from investors. In the past decades, startups might go directly to individuals and ask them to back the project. This was termed to be Crowdfunding. However, nowadays most startups have started to issue digital tokens that promise the utility of future services.
An ICO in the world of cryptocurrency defines the scheme by which a community raises funds for a new cryptocurrency project. The crypto world experienced this new scheme of fundraising which boosted their pockets in the year 2017. According to ICORating, it was recorded that ICOs have raised around $8.3 billion in the first half of 2018 which has doubled than the previous year!
Now, let us see…
Crowdfunding ICO Model Vs Traditional Crowdfunding
Traditional Crowdfunding is the strategy leveraged by small and medium enterprises to raise funds for their projects. This fundraising is performed by a large set of people on the Internet. For instance, there are Traditional Crowdfunding platforms such as Kickstarter or GoFundMe which are intended to raise funds for starting the business successfully. Pebble is one such example of a Traditional Crowdfunding platform that has managed to raise over $10 million from various investors around the globe.
While in the case of the Icrypto crowdfunding ICO model, the startup will have the idea of the project and would require funds from the investors to kick-start them. The primary difference between both is the Initial Coin Offering will assist the startups which have the idea only for Blockchain projects. But in the case of Traditional crowdfunding, the project can be of any domain. Also, in ICO, investors will use cryptos instead of fiat currencies for buying crypto tokens.
In ICOs, the startup will initially draft a whitepaper that includes the primary ideas, the team behind the token development, the business model, the current market overview, etc. With this, most of the investors who are interested in the idea will start purchasing the Tokens. With the rise of price in tokens and gaining the required funds for the project, the Initial Coin Offering strategy remains beneficial from both ends!
Why is Crowdfunding ICO Platform way better than Traditional Crowdfunding?
If you are considering a fundraising campaign, an ICO can bring a huge amount of money in a short period from people across the globe. Moreover, in the case of ICO, the markets offer higher liquidity with fluctuations each day. With higher liquidity, the value of the cryptocurrency enhances as the business & projects start to rise. But in the case of Traditional Crowdfunding, there is no such liquidity ensured!
There are great advantages for both Entrepreneurs and Investors. For Entrepreneurs, offering tokens to investors is liberating, particularly due to the definition of rights. Moreover, they can Pre-Sell ICOs of a project under development, which allows the companies to validate the business models, build the target customer bases, and communicate with them even before the project gets launched. Since ICOs aren’t intended to be launched in a particular location, there is a possibility to reach a wider set of audience. Hence, there are high possibilities of obtaining investors to fund the projects. While traditional fundraising is typically reserved for institutional investors.
Therefore, launching Initial Coin Offerings is the best way to fundraise the projects that remain beneficial for both Entrepreneurs and investors undoubtedly!
What is Essential For Launching a Crowdfunding ICO Platform?
When it comes to ICO, crypto token development, and whitepaper are more important. Crypto tokens play a vital role in the crypto marketplace right now. Comparing crypto coins and tokens, many people are showing interest in crypto tokens. Because crypto tokens offer several beneficial factors and help startups quickly raise funds for their projects. Besides, crypto tokens are created by using the existing blockchain platform.
Before launching your ICO platform, you need to create a crypto token with ideal features. You might ask – How to create a crypto token for business? The answer is simple, first, you need to choose the blockchain platform for crypto token creation. When it comes to crypto token development, there are three powerful blockchains that you can choose for creating a superfine crypto token.
- Ethereum (You can create ERC20 token for its fungibility)
- Tron Blockchain (You can create TRC20 token)
- Binance smart chain (You can create BEP20 token, the most efficient and popular token standard)
Thus, create a crypto token and have a proper whitepaper with the help of a professional Crypto token development company in the blockchain space.
Wrapping up
ICO funding model is creative and many people are using it properly for raising funds quickly. It has some drawbacks due to some improper regulations but on the other hand, it has notable advantages which will be beneficial for many crypto startups and entrepreneurs. If you are willing to raise funds by creating a crypto token by using Ethereum, Tron, or Binance smart chain at a budget-friendly price.
Then choosing ZAB Technologies will be the ultimate solution for kickstarting your crypto business.
