Cryptocurrencies and blockchain technology are garnering worldwide interest, with thousands of new companies emerging in the industry. Similar to other products and spheres, entrepreneurs must start by identifying a problem that needs solutions and develop a game plan on how to solve it. Having put together a team of developers to build the platform, the next crucial stage is acquiring the necessary funding. And, to make that happen, you would have to approach investors familiar with the concepts and interested in investing in the crypto field.
You can check the several sources available out there, like a renowned startup accelerator, Initial Coin Offering (ICO), similar to the conventional IPO, angel investors, and venture capitalists. If you aren’t quite sure about the appropriate source you should tap, read ahead for some more information on how to get started.
Incentive-Based Crowdfunding
Offering investors incentives for funding your blockchain or crypto startup is a great option. You can offer unique digital assets like non-fungible tokens, and native governance or utility tokens. Since crowdfunding is a community initiative, you must garner interest in your venture by using aggressive organic marketing programs and communicating with participants to generate adequate hype for the project. That’s how you’ll engage investors and inspire them to finance your idea. You must also offer detailed information about the specific problem your blockchain startup will solve. Ensuring complete transparency is crucial to acquire the funding you need.
Understanding Initial Coin Offering (ICO)
Crypto startups can raise significant amounts of funding for their startups quickly by offering an Initial Coin Offering (ICO). You’ll offer investors the option to purchase digital assets, typically cryptocurrencies. These assets are termed utility tokens or security tokens. Security tokens enable investors to participate in future revenues. However, utility tokens give them the right to access services or blockchains, thus allowing them to digitize their rights.
Unlike conventional sources of funding, you won’t have to create elaborate pitches to prove that your idea is viable and a valuable investment. Your business plan is open to the public, and they have the option to invest as much as they want, even if the startup is at its conceptual stage.
Sign Up for an Accelerator Program
If you have a viable crypto business idea but aren’t quite sure how to get it off the ground, research accelerators that specifically support blockchain technology. Once you find a suitable program, sign up with the agency and commit the next few weeks to them. These programs offer you the necessary resources to develop a working prototype. You’ll get a workshop, materials, infrastructure, and, if needed, staff assistance, along with the opportunity to attend seminars and network.
At the culmination of the program, the mentors directing your efforts introduce you to investors who support crypto innovations. You’ll also receive guidance on how to create a pitch deck and present to potential financiers. Accelerator programs are not just ideal for entrepreneurs developing a new idea or concept, but also for established business owners looking to scale their companies.
Angel Investors
If your project is interesting and excites curiosity and intrigue, you can attract substantial funding from angel investors. These financiers are typically private entities you can connect with at informal gatherings or when networking. Make sure to have an elevator pitch ready so you can impress the investor with the business proposal. You can not only acquire funding, but you might get additional assistance with building the company.
Startup owners ready with an innovative crypto business idea can tap into several funding sources to build a new product line that can solve a problem. And, make significant profits from it.
BIO
Alejandro Cremades is a serial entrepreneur and the author of The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star, Barbara Corcoran and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way of raising money for entrepreneurs.
Most recently, Alejandro built and exited CoFoundersLab, which is one of the largest communities of founders online.
Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding, where he was involved in one of the biggest investment arbitration cases in history ($113 billion at stake).
Alejandro is an active speaker and has given guest lectures at the Wharton School of Business, Columbia Business School, and NYU Stern School of Business.
Alejandro has been involved with the JOBS Act since its inception and was invited to the White House and the US House of Representatives to provide his stands on the new regulatory changes concerning fundraising online.
