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The 3 key ingredients for attracting investors to your crowdfunding (ICO/STO) campaign

Below is a redacted and slightly edited and updated version of a memo provided to a client regarding how to attract investors to their business, in mid 2017. For background, they’re a 5 year old private investment firm, whose stock is traded OTC and who invest in startups focused on blockchain tech. To further this model they were exploring additional ways to raise capital, specifically to acquire more startups. Below is a high level framework of what investor “whales” are looking for. This is not investment advice. These are redacted insights into what you should be considering if you’re looking to also engage potential investors in your business enterprise.

If you don’t have time to read it all, I’ll summarize: It still takes money to make money.

Note — all crowdfunding campaigns (regardless of if you call them ICOs / STOs) require a legitimate business model, tangible solutions to real problems, market size worth investing in and the potential for 100x returns. Otherwise, whales aren’t interested in 10x returns.

Samson Williams, Principal, Axes and Eggs

Magic Whale Formula: Online presence + In person Conferences + 100x return potential + Influencers = Investors (Whales)

Online presence — A strong online presence is needed in effort to build awareness of your business and business model. A strong presence is also required as upwards of 90% of your online followers will be either bots or individuals who you have in fact paid to follow you. Bounty programs don’t generate actual clients/customers. Of the 10% remaining, less than 10% of those will take action to directly invest in your business. However, early and passionate adopters are needed to help attract and grow fast followers.

Conferences and Fast Followers — In person appearances at conferences are needed to build

  1. Awareness and
  2. Trust

People simply do not invest in people they are not aware of (duh) and don’t like. If someone does not like you, they cannot trust you. People only engage and do business with people they know, like, then trust. For instance,

when is the last time you bought something from someone you didn’t know and trust?

Influencers — ICOs and STOs are simply crowdfunding. However, in this paradigm of crowdfunding it is not based on the delivery of goods, products and services. Rather, participation in ICOs/STOs is predicated on the expectation of the future delivery of goods, products and/or services. There are no blockchain products/services currently on the market. In this ecosystem of hype, Influencers play a key role as the trusted voices within the community. Whether or not they should be trusted is moot. Influencers (e.g. Ian Balina, Suppoman, DecentralizedTV etc…) role in the ICO/STO ecosystem is to provide what seems to be rational / quantitative analysis of blockchain based projects. However, because no actual DLT projects exist, they are in fact mere purveyors of opinion, on the future of research and design in the application of DLT technologies. But — people like them. They embody and project the essence of “success”, despite the clear lack of any empirical evidence of success beyond the ability to pump and dump a given crypto/project. Despite the lack of products and evidence of success, people like Influencers and they trust their opinions. So much so, they give them their money.

In conclusion, Humans don’t trust data. Humans trust how they feel about other humans.

Approval, mention or investment by Influencers in the crypto/blockchain space, as trusted members of the community, are a prerequisite of having accredited & institutional investors participate in your crowdfunding offering. As without their involvement it is highly unlikely that anyone will a) know your offering exists b) like it c) get excited enough to engage you and d) trust you enough to give you their money.

Lastly, don’t forget that in all cases you need to show:

  1. What problem the business is resolving
  2. How the solution is unique
  3. How business will make its first dollar and when
  4. What the return/profitability of the investment will be
  5. Admit you’re issuing a security (whether its called an ICO/STO) and follow all applicable securities laws

Minimum 100x ROI Potential

You’ve got to show that these businesses have a 100x return potential. Anything less really isn’t worth the paperwork for whales. The shorter the return window the better. Keeping in mind securities laws.

So What ?

Options for achieving the magic for attracting whales in ICO/STO crowdfunding projects:

Option A - Pay an influencer. Up front cost of $$$ — $$$$$ minimum + $100k to $1M for listing on an exchange (Reminder — this was written in mid 2017 and figures are not reflective of 2019 market conditions)

Option B - Become an influencer. $$$ — $$$$$, plus a two year process. Hit or miss. As you will need to establish credibility thru investing in crowdfunding deals that 10x or greater, as well as.

Option C - Support an influencer. $$ — $$$. Two to three month process. Identify a lesser known influencer and form a strategic partnership to support growth of their brand. With the clear deliverable that they support your crowdfunding initiative when you do it.

Option D - Make an influencer. $$ — $$$$$. Two + year process. Identify someone who has the bonafides and feel of an influencer and introduce and promote them to the community, with the expectation that they’ll promote your crowdfunding campaign when the time comes.

Option E — Do not engage, support or create an influencer and see how it plays out.

(Client Name Redacted) Recommendations

  1. Refine the NAME REDACTED brand ($$)
    1. Hire a branding person
    2. Update the website and create marketing collateral
    3. Great examples:
      1. www.www ( client of ours in Germany)
      2. www.www
      3. www.www
  2. Engage an Influencer
    1. See options above
  3. Plan a proper world tour (similar to Ian Balina’s World Tour)
  4. Capitalize Name Redacted
    1. Create a fund specific to cryptocurrencies / blockchain
      1. Allows others to invest in fund and/or NAME stock
      2. Spread message via magic whale formula
      3. Redacted line.
  5. Allocate $1M for strategic investments:
    1. $200k — $300k of strategic crowdfunding investments, tbd
      1. LINE REDACTED
      2. The investment is for the publicity
      3. Would recommend focusing on distressed assets, that align to NAME REDACTED acquisition of IP
    2. Make ten, $100K dollar investments in startups considering using blockchain
    3. As a requirement of the investment, they must use NAME REDACTED blockchain and promote its use
    4. These 10 firms become marketing pieces for NAME and NAME
      1. For instance: NAME REDACTED is looking to leverage blockchain for their real estate endeavors. They have a community of 30K+
      2. A $100k would buy some equity investment in them and push/promote NAME and NAME into their 30K community
      3. NAME REDACTED DC/China based firm ran by NAME REDACTED. Chinese ICO influencer, who moves more $ than Ian Balina but isn’t as well known as he is Chinese. $100k in one of his startups would bring his and his network’s attention
      4. Other examples include: www.www (gets NAME into BIG ASS EVENT next year) , NAME REDACTED (video gaming community) NAME REDACTED
  6. These actions would allow NAME REDACTED to build its brand, and accomplishes:
    1. People become aware of NAME REDACTED
    2. They can get to like it and its mission, vision and values
    3. LINE REDACTED
    4. Without this strategic investment NAME REDACTED will have great difficulty raising its stock price, as others in the Asia Pacific area jockey for position, spotlight and investor dollars. Such as Tin Men Capital, out of Singapore, makes first close of US$100M B2B startup fund; invests in Overdrive IOT, Globaltix.

Yes, this requires capital to be invested directly into building NAME REDACTEDs brand and market presence. In order to move the needle on NAME REDACTED stock price back towards $30+, it is advisable to allocate funds strategically, make strategic high growth potential blockchain startups and coordinated activities from a single source, to ensure that they have the maximum impact possible.

Sincerely,

Axes and Eggs

End of Memo

——————————————————————————————-

In short, it still takes money to make money.

Hope you found that interesting and hopefully helpful. Remember that as you go to build your business you can investing the marketing dollars to engage influencers, become influencers or devine a different marketing and engagement strategy that works for your good, product or services. No two offerings are alike. So don’t be afraid to tweak the Magic Whale Formula to fit your specific needs. If you find you need help with your magic marketing formula I recommend contacting [email protected].

Cheers and happy hunting!
@AxesAndEggs

M

https://www.stayingaliveuk.com/podcast/2018/1/0036-ira-s-pastor-biotech-entrepreneur

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UnknownBetween starting a real estate technology company, Hightower, and completing in an Ironman, I’ve had my fair share of feeling in over my head. However, each of these adventures has taught me how to overcome an overwhelming challenge. Here are four humble pieces of advice for all of you crazy enough to do the same.

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I’ve been an entrepreneur most of my adult life. Recently, on a long business flight, I began thinking about what it takes to become successful as an entrepreneur — and how I would even define the meaning “success” itself. The two ideas became more intertwined in my thinking: success as an entrepreneur, entrepreneurial success. I’ve given a lot of talks over the years on the subject of entrepreneurship. The first thing I find I have to do is to dispel the persistent myth that entrepreneurial success is all about innovative thinking and breakthrough ideas. I’ve found that entrepreneurial success usually comes through great execution, simply by doing a superior job of doing the blocking and tackling.

But what else does it take to succeed as an entrepreneur — and how should an entrepreneur define success?

Bored with the long flight, sinking deeper into my own thoughts, I wrote down my own answers.

Here’s what I came up with, a “Top Ten List” if you will:

10. You must be passionate about what you are trying to achieve. That means you’re willing to sacrifice a large part of your waking hours to the idea you’ve come up with. Passion will ignite the same intensity in the others who join you as you build a team to succeed in this endeavor. And with passion, both your team and your customers are more likely to truly believe in what you are trying to do.

9. Great entrepreneurs focus intensely on an opportunity where others see nothing. This focus and intensity helps to eliminate wasted effort and distractions. Most companies die from indigestion rather than starvation i.e. companies suffer from doing too many things at the same time rather than doing too few things very well. Stay focused on the mission.

8. Success only comes from hard work. We all know that there is no such thing as overnight success. Behind every overnight success lies years of hard work and sweat. People with luck will tell you there’s no easy way to achieve success — and that luck comes to those who work hard. Successful entrepreneurs always give 100% of their efforts to everything they do. If you know you are giving your best effort, you’ll never have any reason for regrets. Focus on things you can control; stay focused on your efforts and let the results be what they will be.

7. The road to success is going to be long, so remember to enjoy the journey. Everyone will teach you to focus on goals, but successful people focus on the journey and celebrate the milestones along the way. Is it worth spending a large part of your life trying to reach the destination if you didn’t enjoy the journey along the way? Won’t the team you attract to join you on your mission also enjoy the journey more as well? Wouldn’t it be better for all of you to have the time of your life during the journey, even if the destination is never reached?

6. Trust your gut instinct more than any spreadsheet. There are too many variables in the real world that you simply can’t put into a spreadsheet. Spreadsheets spit out results from your inexact assumptions and give you a false sense of security. In most cases, your heart and gut are still your best guide. The human brain works as a binary computer and can only analyze the exact information-based zeros and ones (or black and white). Our heart is more like a chemical computer that uses fuzzy logic to analyze information that can’t be easily defined in zeros and ones. We’ve all had experiences in business where our heart told us something was wrong while our brain was still trying to use logic to figure it all out. Sometimes a faint voice based on instinct resonates far more strongly than overpowering logic.

5. Be flexible but persistent — every entrepreneur has to be agile in order to perform. You have to continually learn and adapt as new information becomes available. At the same time you have to remain persistent to the cause and mission of your enterprise. That’s where that faint voice becomes so important, especially when it is giving you early warning signals that things are going off-track. Successful entrepreneurs find the balance between listening to that voice and staying persistent in driving for success — because sometimes success is waiting right across from the transitional bump that’s disguised as failure.

4. Rely on your team — It’s a simple fact: no individual can be good at everything. Everyone needs people around them who have complimentary sets of skills. Entrepreneurs are an optimistic bunch of people and it’s very hard for them to believe that they are not good at certain things. It takes a lot of soul searching to find your own core skills and strengths. After that, find the smartest people you can who compliment your strengths. It’s easy to get attracted to people who are like you; the trick is to find people who are not like you but who are good at what they do — and what you can’t do.

3. Execution, execution, execution — unless you are the smartest person on earth (and who is) it’s likely that many others have thought about doing the same thing you’re trying to do. Success doesn’t necessarily come from breakthrough innovation but from flawless execution. A great strategy alone won’t win a game or a battle; the win comes from basic blocking and tackling. All of us have seen entrepreneurs who waste too much time writing business plans and preparing PowerPoints. I believe that a business plan is too long if it’s more than one page. Besides, things never turn out exactly the way you envisioned them. No matter how much time you spend perfecting the plan, you still have to adapt according to the ground realities. You’re going to learn a lot more useful information from taking action rather than hypothesizing. Remember — stay flexible and adapt as new information becomes available.

2. I can’t imagine anyone ever achieving long-term success without having honesty and integrity. These two qualities need to be at the core of everything we do. Everybody has a conscience — but too many people stop listening to it. There is always that faint voice that warns you when you are not being completely honest or even slightly off track from the path of integrity. Be sure to listen to that voice.

1. Success is a long journey and much more rewarding if you give back. By the time you get to success, lots of people will have helped you along the way. You’ll learn, as I have, that you rarely get a chance to help the people who helped you because in most cases, you don’t even know who they were. The only way to pay back the debts we owe is to help people we can help — and hope they will go on to help more people. When we are successful, we draw so much from the community and society that we live in we should think in terms of how we can help others in return. Sometimes it’s just a matter of being kind to people. Other times, offering a sympathetic ear or a kind word is all that’s needed. It’s our responsibility to do “good” with the resources we have available.

Measuring Success — Hopefully, you have internalized the secrets of becoming a successful entrepreneur. The next question you are likely to ask yourself is: How do we measure success? Success, of course, is very personal; there is no universal way of measuring success. What do successful people like Bill Gates and Mother Teresa have in common? On the surface it’s hard to find anything they share — and yet both are successful. I personally believe the real metric of success isn’t the size of your bank account. It’s the number of lives where you might be able to make a positive difference. This is the measure of success we need to apply while we are on our journey to success.

Naveen Jain is a philanthropist, entrepreneur and technology pioneer. He is a founder and CEO of Intelius, a Seattle-based company that empowers consumers with information to make intelligent decisions about personal safety and security. Prior to Intelius, Naveen Jain founded InfoSpace and took it public in 1998 on NASDAQ. Naveen Jain has been awarded many honors for his entrepreneurial successes and leadership skills including “Ernst & Young Entrepreneur of the Year”, “Albert Einstein Technology Medal” for pioneers in technology, “Top 20 Entrepreneurs” by Red Herring, “Six People Who Will Change the Internet” by Information Week, among other honors.