Private placement for your fundraising efforts & ICO

What is a private placement for fund-raising projects and what does it entail?
Private placement is the initial phase in which capital is raised before the public placement and it is usually reserved for whitelisted investors.  

These are usually but not necessarily investors who can invest bigger amounts of money, can buy equity (convertible loans) instead of tokens or can join the projects as strategic partners who not only buy equity or tokens, but also provide some sort of services in the growth of the venture.

The seven major ways to seek funding in the private placement are:

1. Direct outreach to around 100 liquid institutional funds that support full range of crypto projects and are focused on crypto projects.
   1. Equity investments in the company organizing the ICO
   2. Token investments in the private sales
2. Direct outreach to whale investors (big crypto holders) with abundancy of capital they want to diversify or invest in projects they like.
   1. Conference organization for at least 30 HNWI investors interested in more projects. At least 3 to show are needed.
   2. Private events organization with a Swiss based partner for 12 HNWI interested in the project
   3. Phone calls by people within their network who would refer projects for a referral fee & sometimes cash compensation
3. Crypto Pools that invest from 20 ETH, to 500 ETH (10,000 EUR to 250,000 EUR). Rarely, for good projects pools can gather upward of 1 million EUR or upward of 2,000 ETH.
4. KYC compliant pools of bigger investors that started to arise in June 2018
5. Investment centers to acquire investments from SMEs investors and pool means from 1 million EUR to 20 million EUR.
6. Strategic partnerships with future clients who can also become early investors and support the grow of the venture.
7. Early token swaps with other strategically compatible ICOs that do the ICO at the same time or are already listed. Partners can exchange their tokens at token market prices & hedge part of the risk from holding certain types of assets.

 
Working with an agency like TSM would ensure not only confidentialty of your actions and knowledge of what works in practice, but also ensure impunity as if some information become public, such as that you are negotiating or doing business with one pool instead of other you would always have the option of saying it wasn’t you who negotiated the deal. It was TSM!
 
Tokens & coins value rest on the faith of people who buy them and use them. Entrepreneurs are like faith managers & with their projects they need to increase the faith that their coins are the ones that deserve the faith of the community.
 
Hence, there are many rules to be respected when negotiating with partners from the early private token sales onward. Here are some tips:

• You must not make your token seem cheap by giving too big discounts
• Showing interest and validating your idea with the community is a must
• You must have a coherent and well-planned bonus system
• The assumption that big investors know each other is oftentimes true
• You must have the answer why crypto is better than fiat for your project

 
Here is how a successful ICO/TGE fundraising would look like:

1. Early equity support by equity funds, founders or FFF
2. Support by angel equity investors & syndicates e.g. Angellist
3. Early validation by future users of the platform
4. Approach of crypto pools & digital institutional funds
5. Private sale with investment in marketing & ads
6. Public sale with bigger investment in marketing & ads

 
Here are some of the early fundraising mistakes we often see:

• Founders start investing in ads right away and get the public investors instead of the public ones early on and limit their total raise
• Pools are not approached in the right way, with the right deals at the right time. Sometimes founders approach more pools at once without knowing they talk to each other.
• The balance between the investment size & the expected returns is not appropriate. The minimum founders should plan in direct investment in marketing is 5% of the funds aimed to be raised. This is usually around 8% not counting referral fees.
• The product even when it is natural fit for the crypto community, it is not packed in a way the investors’ community will understand it.
• There is no pricing strategy and bonuses are not optimized to facilitate greatest returns and sustainability of the venture.

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Here are some important questions we answer for our paying private placement clients:

• What are some normal percentages for raising funds in the industry?
• How much we can expect to raise from a private event or a conference?
• How to structure your private placement bonuses? To whom to offer what?
• How long should the private placement last? When should it be done?
• How to prevent dumping after listing? How to retain high token price?
• Which partners have a proven track record of raising funds? ROI?
• What gives the best ROI and what is the best strategy for your project?
• What is the risk level of all fundraising activities mentioned above?

So, book us today and inquire into the prices and risk/rewards ratios of different fundraising techniques we have had the privilege to do for multitude of clients. By iSEE MarkComm at www.iseemark.com