Why the ICO is the beginning, not the end of the journey

Written by: Lukas Schor of Argon Group

“The residue of celebration and champagne lingers, the latter still cloying to the desks and tables. No one has turned on the lights yet. The morning slowly illuminates the office, a cavernous space with only a handful of desk.

This is the day after the ICO.”

Many ICO teams may find themselves in a similar situation as described above, and ask themselves: “So what now?”

The post-ICO/execution-stage is as important as the pre-ICO/planning stage, yet, this remains an area in which the entire ICO industry must improve, especially as regulatory scrutiny increases.

It is crucial to understand that the ICO is not the end of the journey. Rather, raising money through a sale of tokens or cryptocurrencies is accompanied by various responsibilities, liabilities and obstacles.

In this piece we will take a look at what lies ahead.

Investor relations

We have learned from many companies about the challenge of keeping up with community and investor queries after the ICO has ended.

Investors have various needs, which, depending on the structure of the token sale, are not only moral but also legal obligations for the project team. This includes:

• Continuous and transparent updates on the project development
• Efforts to promote the token and ensure its liquidity
• Secure storage and management of the received funds

The first point is particularly important to investors during the months right after the ICO, as stories of exit scams are burnt into their heads and any radio silence from the developers or founding team will make investors nervous. The mantra in this stage should be “Communicate as much as possible”.

Ideally, projects deploy professional public relations and customer service staff that can field questions, preferably in an open and shared environment such as Twitter or Telegram.

Frequent reports and updates on the progress of the project can assuage concerns, especially in light of delays or unanticipated problems. Having a team that can address rumors, innuendo, and negative press in a clear, professional and authoritative way will inspire confidence, potentially buffering a coin from sharp drops in price and bad reputation.

Marketing & PR

With a successful ICO comes the attention from the media and the crypto-community. With this level of attention, it is important to lead the overall discussion via a strong PR and Marketing strategy once the ICO concludes. Luckily, compared to pre-ICO projects, post-ICO projects are not banned from popular advertising networks such as Google, Twitter and Facebook.

However, with the funds raised and the numerous stakeholders and partners involved, communication through various channels after the ICO requires even more consideration than before. This communications must be:

• complete
• transparent
• realistic

Token listings

One of the moral responsibilities towards investors includes providing liquidity for their investments. This can be achieved by getting the token/coin listed on various cryptoasset exchanges such as Bittrex, Poloniex, etc.

Generally, there are a few exchanges that are more open to list new cryptoasset than others. But which exchanges are likely to be a good fit for a certain cryptoasset and how to best approach these exchanges is a science in itself. This also depends on various factors such as the legal structuring of the cryptoasset and whether it is an ERC-20 token or a token/coin based on a proprietary blockchain.

Legal

Setting funds aside for appropriate legal counsel to address concerns from governing regulatory agencies, such as the Securities and Exchange Commision (SEC), is rapidly becoming a necessity. A prolonged legal battle can derail any progress an ICO project has made and quickly eat away at capital. This is especially a concern for ICOs who have accepted money from U.S. investors.

We strongly recommend that post-ICO projects conduct an audit to ensure that the tokensale complied with regulations of key jurisdictions and is structured correctly in order to prevent costly reversals of investments.

Product Development

Most projects aim to solve very ambitious technical problems. Additionally, the technology itself is still in its infancy and bears many unresolved issues (i.e. scalability). This requires a lot of effort being put into research and product and infrastructure R&D.

After the project switches to the actual implementation of the technology, focus is the linchpin. To achieve an appropriate focus on the project implementation, a detailed, transparent, and flexible product development roadmap is recommended. This includes key development milestones with appropriate success criteria.

Some best practices of post-ICO product development can be found in this article.

Hiring

To achieve the ambitious product and go-to-market roadmaps of the project, the team needs to scale up quickly after the sale has concluded. However, even though speed is important, the quality of the hires should be of highest priority. This is especially challenging as experienced talent is still hard to find in this market.

“It is good to get extra help building on a project, but the right hire is crucial. A wrong fit can result in higher costs than benefits for the company.”

Security

While ICO projects are already prone to hacks and scams during the sale, this certainly does not stop after. After all, there is a lot of money that hackers can potentially steal from finished ICO project’s wallets.

Besides phishing attacks, ICO funds can also be vulnerable to theft due to previously unknown bugs or errors in the underlying code of the wallets. An example of a catastrophic bug is the case of the Parity multi-sig wallet which caused over $150 million of customers funds to be frozen last year.

Therefore, key fund management activities should be conducted to ensure the safety of the funds such as:

• Fund storage
• Fund security
• Value management
• Cap table audit
• Conversion to fiat

Post-ICO Services by Argon Group

We at Argon Group learned through our work with clients such as Civic, Blockchain Capital, Storj, Nuggets, THEKEY and many more about the importance of these post-ICO activities. This is why we are pioneering a suite of services to cover the needs of blockchain projects that have successfully completed an ICO so they can keep their focus on building great teams and revolutionary technologies.

Our post-ICO services include:

• Token sale audit (token economics, legal & compliance, cryptocurrency storage and security, cryptocurrency conversion and value management)
• Investor relations (ongoing token reporting requirements and communications)
• Marketing & PR (investor outreach, strategy & implementation for increased exposure, roadshow, key markets PR, digital communications, strategic adviser review and outreach, industry partnership mapping and outreach)
• Token exchanges (listings, trading and volume driving)