While ICO fundraising FOMO race is long gone, crowdfunding supporters are leaning towards STO model. Howeverblockchain startups can’t follow ICO model to run a successful STO fundraising. This guide can help you set up a successful marketing strategy.
Since the ICO fundraising took a big hit, Security Token Offering (or a so-called STO) is gaining popularity in the world of digital fundraising. The argument most investors put forward is the fact that, STO is more reliable, trustworthy and regulated than Initial Coin Offering (ICO)model.
The key to successfully raise funds via a global pool of potential contributors is possible through an STO platform. Based on the Global STO Study conducted by Blockstate earlier this summer, 124 STO projects (50% completed) have already raised nearly $1 billion, most of them operating in Financial sector, with projects and funds coming majorly from USA.
STO is still a new concept and many investors do not know what STO is, yet alone how to draft an STO marketing strategy.
A highly targeted STO marketing strategy is vital to achieve the fundraising goals. Not all investors who were there to put their money into ICOs are here to invest in the STOs. Back in 2016-2017, there was a spike of a big number of retail investors coming onboard as a part of crowd funding. Today there are much less investors, in fact – most money comes from institutional investors, family offices and VCs. As there are much less investors, your marketing strategy also needs to be more precisely defined. And let’s not forget, securities laws will apply to your STO fundraising as well, thus you can not really follow ICO method and expect to be legally fine.
So what is needed for a successful STO marketing strategy?
To run a successful Security Token Offering (STO) marketing campaign, you need to work in line with your compliance team and have experience with the securities market. Remember, you are in regulated market now! Every word, every action could have legal consequences.
7MARKETZ’s team has assisted and helped numerous blockchain projects get their marketing off the ground, and we are here to share with you some of the main elements to your securities token offering campaign too.
- Get the basics right
Before doing anything at all, you need to make sure you’ve got the Business Plan. In the blockchain world, many are referring to it as a “whitepaper”. Like in any business, a whitepaper is one of the key factors behind any successful STO or ICO. In fact, it’s impossible to make fundraising successful without a detailed whitepaper. Never miss to include regulatory, financial, technical and commercial information about your project in it.
In fact, regulation is an essential part of your STO fundraising. New SEC rules have strict guidelines for STOs, which must be followed if you want to avoid being penalized. Make sure you speak to a qualified compliance consultants before running your STO to comply with the latest regulatory framework in your geographic area(s). And, no! Most of the exchanges who offer you to run an STO campaign are not running legal fundraising campaigns.
Almost no investor will consider investing in your project if you have nothing ‘tangible’ to present. Make sure you’ve got at least your minimum viable product (MVP) to showcase to potential investors. And remember, the “S” of the STO stands for Security, so what kind of Security are you going to offer?
Having an attractive website is like wearing a suit & tie for a business meeting. Make sure you set the right first impression to your prospective investors. Your site must clearly showcase what is your PRODUCT about (your industry, what problem do you solve), how it WORKS, WHY should people invest in your project, what is the TIMELINE of your project, detail out the TOKENOMICS, and display your TEAM. Some sites also showcase additional information such as events they are attending, latest company news, and amount raised; but these are secondary elements.
Extra tip: Always make sure to have an HTTPS website as it ensures the site is safe and secure. Not only that, the HTTPS website is now an essential factor from a Search Engine Optimization (SEO) perspective because Google started to give importance to HTTPS from late 2018.
Apart from a good product and a strong business plan, investors are putting money into the team itself. Winning team is what it takes to bring a good idea into the next unicorn business. So make sure you’ve got strong talent, especially on your product team. You should also employ advisors (no, not ICO advisors) to your board to advise your project on strategy, marketing, compliance and broker dealer network set-up. They will not just mentor your team but also boost your project credibility in front of potential investors.
Last but not least, STOs are performed on so-called platforms, and you should choose the one that is reliable and most of all – secure. Listing on an STO platform will cost you a 6-figure $$$$$$ so you’ve got to prepare your pocket for a reliable partner. Remember what we said above, most of the STO platforms are not properly covered by law. So, you have to Do Your Own Research before jumping in with anyone.
- What will the Google search tell about your project?
So you’ve set up your STO project. Now what? How will investors find you? Did you try Google’ing your project name? If you cannot find your own project in the search results – nobody else will! Search engine optimization (SEO) is an important part of marketing. SEO techniques will allow you get better ranking on search engines by improving traffic to your website.
In addition to SEO, having a blog will help you improve organic traffic. You can start by writing on Medium.com, LinkedIn Publisher or another free cryptocurrency-focused website. Having fresh content being published with your project name once or twice a week will boost your visibility. Make sure the management team is active and is involved in what is called Thought Leadership, as it will increase your team’s credibility among potential investors.
Apart from free publications, you might want to consider putting your stamp on sites like Forbes, Inc, Entrepreneur and Business Insider. These are mostly sponsored content articles, but your might run a chance of being featured for free as a contributor (or if you know a contributor who is willing to do it for free).
Press releases (PR) and media are also an important factor that can help your project reach out to a wider audience of journalists, blockchain influencers and investors seeking the next “big fish”.
Last but not least, don’t forget about social media! Twitter, Facebook and LinkedIn are still critical channels for your online visibility. There are also other important channels for STO marketing such as Reddit, Telegram and Steem, but we will talk about those more in detail in Part 2 article.
By the way, did you know that you can hire 7MARKETZ Marketing Experts to consult and run your STO marketing? Check our blockchain services and package solutions to learn more about what we do!
So this is the end of… Part 1! Let’s recap on your STO marketing checklist:
- Make sure to have a detailed whitepaper
- Don’t neglect compliance with regulation
- Hire a winning team & don’t trust exchanges with their bla bla’s
- Launch minimum viable product and know your “security”
- Develop an attractive website
- Choose a secure platform with good track record
- Get on with search engine optimization
- Start blogging
- Showcase thought leadership
- Run with public relations
- Focus on social media marketing
Make sure to subscribe to stay updated when we release the Part 2 of the article! We’ll talk about how to push the media activities and get investors onboard!