How Much Does it Cost to Launch an ICO?
Breaking down the costs
Basically, an ICO (initial Coin Offering) is a crowdfunding event that seeks to raise funds for a particular project. Although there have been reports of successful ICO events such as Filecoin and Bancor, not all companies that go the ICO way succeed. In fact, an ICO can be detrimental to some projects.
However, if you are strongly considering using an ICO to fund your project instead of the long and tedious processes of registering an IPO or seeking funding from venture capitalists, here is a breakdown of what you need to know.
Creating the Smart Contract Token
You will need to create a tradable token that your investors will use to fund your project. Most exchanges require that you have an ERC20 compliant token that will allow the transfer of tokens from one address to another. Here, you will have to hire an ERC20 token developer. Although finding a good Ethereum developer is hard, you can hire an experienced freelance developer to work for about 2 weeks at approximately 10,000 USD.
Distributing the Token During Crowd Sale
After the token has been created, you will need a smart contract program to distribute the tokens to investors as they exchange it for Ethereum. This part can be complicated, but you can hire a developer at about 15,000 USD to come up with a Crowd Sale Smart Contract. This will take another 3 to 4 weeks to finish.
Smart Contract Audits
To guarantee your investors complete security of their investments, you will need to audit your smart contracts. Frankly, the significance of this stage cannot be overstated as you will expose any vulnerabilities in the code. Here you will spend about $50,000 if you get audited by a reputable company.
Coming up With the White Paper and the Website
Now that you have dealt with the technicalities, you will need a white paper that serves as a presentation to your investors, explaining the project’s milestone and vision. Also, be sure to launch a professional looking website to show off your projects goals and plan. Here you might spend approximately 10,000 USD.
You will also need a marketing team to create a buzz online so that you can capture the attention of investors. Plus, it’s important to incorporate a legal structure that will indemnify your company. In the end, you might spend a minimum of $100,000 just to kick off your project.
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Are you planning to launch an ICO for your project? Are you part of an ICO team that is yet to launch? Share your thoughts and experiences and let us know if you found this useful!