10 Steps to do an ICO Series: Step 7 How To Pick The Right Advisor
Unlike typical startups, ICOs usually use advisors to help with various functions of the company. We have new projects signing up to our platform daily, so I have seen and evaluated over 400 ICOs. Most ICOs that I see do not understand the role of an advisor.
Advisors have 3 functions.
- Cryptocurrency influencers
- Cryptocurrency experienced
- Domain experts
Crypto influencers lend their name to the ICO to not only give it credibility and legitimacy, but also to widen their reach. Crypto influencers tend to be polarizing personalities so I advise to be careful with who you approach. They are typically the most useful with fundraising since they have a wide reach, and they can quickly get the word out about your project. In short, they can make you millions.
These are advisors that have been in crypto for a while, or have successfully completed an ICO. They may not have the reach of an influencer, but they are equally as important since they can give you advice on how to successfully conduct an ICO, and tell you what pitfalls to avoid. In short, they can save you millions!
The domain expert in your field is a tremendous asset especially post ICO. They can help with setting up your technology correctly, and can introduce you to people in your industry as well as help facilitate partnerships. If your technology is attractive enough, this is where your company’s potential buyer will come from.
Scope of Advisor Involvement
This is determined between the ICO and the advisor, however don’t expect the advisor to work on your project full time. Another tip, since most ICOs extend their fundraising timeline, your advisors may be with you for over 6 months which is a long time. Make sure that you manage the advisors expectations as to how involved you need them to be. Lastly, speak with your advisor monthly so that they can make sure that you’re on the right track.
“We would love for you to be our advisor”
I refuse the vast majority of projects that approach me. While I am honored and flattered, there are a few criteria that I look at when evaluating which projects to devote my time to.
1. Does the project interest me?
If it’s anything about payments, onboarding newbies to crypto, gaming, or any cool ways to make my daily life better with crypto it’s pretty much a given that it will pique my interest.
2. Does the team have a clue?
Is their website/product well designed? Are they first time entrepreneurs? Do they have a feasible go-to-market strategy or are they just developing something cool for the sake of it?
Do they have the flexibility to make difficult changes when advisors suggest? Do they understand the hustle that they need to make their company successful?
3. Is the team legitimate?
I do due diligence on the team to make sure that they have the expertise to finish building what they are building and actually ship software. Also (and this should be obvious, but) no criminals, no drugs, and no questionable behavior.
4. Am I a domain expert in their field?
I want to make sure that I have some knowledge to offer the project. I obviously have cryptocurrency experience, but above that based on my knowledge, can I help them grow their actual business in some way?
5. Do they respect my time?
I am quite busy with running my company ZILLA but I will absolutely make to help them and do my part to contribute to their success. Do they understand and appreciate the sacrifice that I am making by being their advisor? Do they appreciate that I am risking my reputation by being their advisor?
How much do advisors cost?
Anywhere from 1% to 10% of the funds raised. I would say up to 3% is reasonable. Advisors usually take a mix of your token and Ether.
You may impose criteria on being an advisor such as advisors must invest in your ICO, or advisors must raise a certain amount of funds etc. However in my opinion if you are looking for someone to fundraise, you should get a syndicate on board, or hire an advisory company to help you with that since direct fundraising is slightly out of the scope of what an advisor is.
If you want to get the biggest bang for your buck, utilize your advisors depending on their skillset.
In closing, just remember that the right advisors can lend a great amount of legitimacy to your project. Make sure your project is at a stage where an advisor will get excited for your project before approaching them to increase your chances of them coming on board.
Step 8 – Tech Team Checklist for Your ICO
First of all, congratulations for making it this far! You now have your MBA in how to run a blockchain business. Your post ICO strategy should be focused on delivering on the promises that you made during your ICO.
The cryptocurrency exchange dimension is what makes the difference between crowdfunding and an ICO. As a crowdfunding contributor, after contributing to a campaign you simply sit, wait, and hope that the project that you contributed to is completed.
This is a technical team’s webapp/website checklist for running an ICO. Note: Some of these steps are relevant only for ICOs with ERC20 tokens. While the rest is applicable to all ICOs.
Unlike typical startups, ICOs usually use advisors to help with various functions of the company. We have new projects signing up to our platform daily, so I have seen and evaluated over 400 ICOs.
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