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Challenges in Angel Investing

Challenges in Angel Investing

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    How to Run an ICO—Advisors

    In running an ICO, the presence of advisors on the team can help burnish the image of the project and increase the chance of success. Currently, many advisors are recruited based on their previous experience with an ICO. As the industry progresses this will become less important and skills related to launching and growing the business will return as the driving factor. Advisors need to bring additional skills and connections to the project as it’s a new space in which there is much to be discovered and learned. Advisors can fill in the gaps of the team. Aside from technical skills they can help with the fundraise by reaching out to their network to find investors. Some have a background in the blockchain world and can help bring credibility to the team. Others have experience with ICOs and fundraising and can help with strategy. Advisors should believe in your project and be able to add value.There’s no magic number of advisors although one typically compensates them so some thought needs to go into how to do so. A typical compensation plan is a small percent of tokens generated from the crowd-sale.   Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    How to Run an ICO-Cybersecurity Best Practices

    Cybersecurity is now a key part of business operations across all industries, especially so for Initial Coin Offerings (ICOs).  It has become a concern for ICOs because of recent, high profile hacks – in particular the loss of approximately $40 million worth of digital currency for the DAO, a decentralized venture capital firm built on the Ethereum network, that was hacked as a result of a security flaw. ICOs must maintain a high level of security which requires attention from anyone running an ICO. The initial reaction among many who learn of a hack is, “I thought the blockchain could not be hacked.” Hacking a well-established blockchain such as the Ethereum or Bitcoin network would still require a tremendous amount of computing power so it is virtually impossible. Instead hackers go after the point of weakness which is the entry points for transferring funds into and out of wallets and exchanges. For those running an ICO, it’s important to take specific steps to prevent scammers. For example, it’s important not to post to an ICO directly with tokens you hold on an exchange as this can easily be hacked.  Also, scammers spoof the ICO with similar looking web pages, and accounts.  Many ICOs today give very specific instructions on how to place tokens on the site for the ICO. One strategy is to take email addresses for those interested in funding the ICO and then when the pre-sale/crowdsale starts, provide funding instructions only to those who signed up.  By displaying the funding instructions on the website you invite hackers to attack your site.   Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    Pre-Sale Campaign for Your Initial Coin Offering (ICO)

    In developing your Initial Coin Offering (ICO), the marketing campaign in advance of the pre-sale or crowd-sale of the token is important for building awareness and growing the network of supporters. The key is to identify your target audience and post in the forums that reach that audience. The campaign should run at least two months as it takes that much time to get around to all the contacts and groups. There are several channels for your pre-sale campaign. Some channels reach a large number of supporters such as BitcoinTalk others are more targeted. These channels include: Classic PR – press releases that describe the upcoming launch of your token- you can use a press release service or send out the release directly yourself. It helps to create a compelling angle in the first paragraph. The PR campaign should start three months before the launch of the crowd-sale. Banner advertising – display ads for extensive reach on Google, Facebook, and more. This can generate more awareness of your ICO and drive some traffic to your site. Influential marketing – your best influencers are advisors to your ICO and their network of contacts.  Reach out to them to see how you can best leverage their network and contacts. Social media – Twitter, Facebook, LinkedIn are great sources to connect with those in the community. YouTube – an explainer video which shows off what your ICO product does can be very helpful in generating understanding and support. Bounty campaigns – referrals driving traffic to your site. A bounty program can activate your user base with incentives and drive referrals. Placements in blogs – posting in relevant blogs and websites. Find blogs that reach your target audience and use their influence to communicate your message. Viral media – If you want to get a community of supporters to get excited and share your message you need to give them a reason to. Competitions can generate a viral effect. Community marketing – posting in community blogs and podcasts. You’ll need to check to see if your chosen community allows for commercial marketing. Events – meet-ups, conferences etc. Events are a great way to do this but like all marketing is a balance between cost and return.     Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    The ICO Bounty Program

    One of the key components of any ICO is the bounty program. It’s an incentive program to encourage others to promote your ICO to the community. It compensates those who promote an ICO project via social media, websites, and other forms of outbound media. A bounty program can increase your raise by 50%. In addition to generating more exposure for your project, you also create more backers. By some statistics, 40% of bounty campaign participants end up buying the tokens. The key is to analyze your community and understand what activities should be rewarded. Examples include social media postings, blog postings, podcast airings, youtube video displays, and there are more. A bounty program should include: Terms of the agreement Sample posts to mail out Requirement to be a member of the program A specific period of time to run the bounty program For those considering participating in a bounty program for an ICO here are some red flags: There’s no whitepaper on the ICO The ICO uses Google or Facebook advertisements They have very little money  (<$50K) allocated to the program After the ICO has completed one can use bounties to find bugs, attract others to the digital ecosystem or foster community engagement. Most bounty programs pay in the token used in the ICO. Some pay in “satoshis” which is a fraction of Bitcoin currently at hundredth of a millionth Bitcoin. You can find these bounty offerings on sites such as Bitcointalk or within the ICO themselves.     Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    Top 5 LinkedIn Groups for VCs

    If you’re looking for a place to find like-minded individuals in a business setting, then LinkedIn groups are a good place to start. It’s a great spot to get and share information, get answers, and even search for or post jobs and business opportunities. As a venture capitalist it’s important to stay connected and on top of news and trends in the industry, so we’ve gathered a few LinkedIn groups to keep you in the know. Venture Capital: Funds, Growth Capital Funding, Business Capital & Financing: WIth 46,525 members, this group is focused on sharing events, connections, and videos as well as resources and training on the venture capital industry. This group was created by Richard C. WIlson of The Miami Family Office, a $500M AUM single family office. Impact Entrepreneur: This group is organized by Laurie Lane-Zucker, founder and CEO of the Impact Entrepreneur Center. It is listed as an official “Best LinkedIn Group” and has 15,914 members. Impact Entrepreneur is in the business of change, and hosts entrepreneurs, investors and scholars who are interested in creative visioning. Startup Entrepreneurs Network: This a group dedicated to networking for startups, investors, VCs, and Angels. SEN has 29,004 members and was started by John Ricci, founder of US Angels, a group that invests in technology, healthcare/life sciences and other sectors across the US. Private Equity Investor Relations, Fundraising, Placement and Investment (and Venture Capital, too):  This is a new group that already has over 31,000 members. It’s for anyone involved in investing, VC funds, and private equity. It’s a great place to post and share articles and insight and to engage in open discussion about current topics. International Wealth Management Group: This group is for networking, discussions and investment opportunities. It currently has over 18,000 members and is open to all, especially those with interest in wealth management. This list just scratches the surface of all of the wonderful groups out there. We think you’ll find that LinkedIn groups can be a quick way to network and share opportunities, opinions, and know-how.   Liza Dickinson is a freelance virtual assistant, writer, and master of keeping people organized. She coordinates TEN Funding events and manages TEN social media outreach.        If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    Token Design for an ICO

    The Initial Coin Offering (ICO) uses the blockchain as a new organization unit – a decentralized and self contained mini-economy.  The token is the key access point into the system as the middleman has been cut out.  Designing the token becomes a key part of the new system as it determines the flow of payments and rewards to those using the system. In developing an ICO, one must determine the cryptoeconomics of the token including the maximum number of tokens, value for purchase (usually based on Bitcoin or Ether or an alternate (ALT) coin), discounts for purchasing early, and distribution of the token to founders, backers, developers, and other uses such as marketing, legal, and security. The key to determining the tokenomics is estimating the size of the digital ecosystem and how many players both contributors and users will engage the system and how many transactions they will incur. One should issue enough tokens to run the core system but also consider how the system may grow over time. One can optimize the token for different goals. Most ICOs issue tokens for building out the system and running it in its basic form.  One could take the longer view and price the token to increase usage of the platform, i.e. setup a price that matches the value the user receives. Similarly, one could price the token to encourage developers to build out the digital ecosystem around the ICO. It can be difficult to develop a plan for the entire life of the blockchain system envisioned so one may consider issuing another type of token later that give a higher level of access to the digital system since it may be in a more mature state. One may also issue different types of tokens to give unique benefits to users.  As the system grows, new applications and higher value benefits will become available.     Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    Whitepaper

    In the world of the Initial Coin Offering, the primary document is called the Whitepaper which covers the key elements of a blockchain-based, tokenized system and associated token sale. Since most projects are in the early phase – conceptual/prototyping, the whitepaper contains not only the business fundamentals, but also the technical underpinnings to the project. Here’s a list of topics to include your whitepaper. Introduction with problem description–set the context for the ICO with the problem you are solving. It helps your case to use numbers to make the problem more specific. Solution—describe your solution and how a tokenized, decentralized blockchain system solves the problem. Technology background—show the technology plan behind the solution.  At a high level show how you plan to attack the problem. Team—show the team especially the technical members who will build the system. Token Description— show how the token works with the proposed system.  Those who contribute receive tokens while those who draw value from the system are contributing tokens. Sale methodology & Redemption process—Show what the tokens cost and how one signs up to buy those tokens. This also includes maximum number of tokens as well as discounts for pre-sales and bounty programs.  In addition describe future redemption plans based on lockup periods. Market size and competitive analysis—show the size of the market you are pursuing and what portion of the market your solution addresses. Security Considerations – show how your token relates to securities laws and if your backers must be accredited investors? Potential Risks – outline the risks in the project including technical, marketing, and otherwise. Disclaimer—list the caveats for the token backer including securities issues. Since the ICO focuses on blockchain technology and the industry is in its early stage, the two key elements backers look for are a strong technical team, and a compelling use case that doesn’t require a tremendous amount of infrastructure to be in place.     Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    Learn how to mitigate fraud at the Texas Venture Forum

    Fraud is an increasing challenge for small business owners. One type of fraud occurs when a new customer or client signs up for your online service, and then later turns out not to be who they said they were. This type of fraud costs small businesses every year. As business transactions have moved online, we are now finding that FinTech tools can introduce increased liability for small business owners. In the Texas Venture Forum, we’ll hold a panel on this topic and hear from one small business owner who was hit with fraud.   In this panel, we’ll propose an identity management solution: the Data Co-op.  What if a small business owner could verify a potential customer or client by asking another business in the community?  The members of the Co-op will have the ability to propose potential client/customer names to the Co-op network to verify if any other business is currently working with that person.  If so, then the likelihood that person is who they say they are is high.  If no one is working with that person, then additional due diligence can be done before taking that person on as a client/customer. The panel “How to Mitigate Fraud for Small Businesses” will be held at 2pm.

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    5 Key Terms in the Blockchain World

    Blockchain is a digital currency used by both Bitcoin and other cryptocurrencies and is currently gaining momentum around the world. Investors as well as people in the technology industry are all abuzz about how it will change the way we invest. Blockchain works not only with Bitcoin but also embraces other cryptocurrencies that followed. Although Blockchain has gained momentum since its invention, it’s still a new and inventive technology. To get a better understanding of this technology it is important to understand some key terms. Below is a glossary of terms relevant to the Blockchain world for the beginner. Blockchain: This is a digital file distributed to everyone that participates in a cryptocurrency network. It basically acts as a digital ledger that keeps track of any transactions that happen within the network. The network cryptographically sealed to prevent anyone from tampering with it. Bitcoin: One of the forms of digital currency with no central bank, that is distributed directly between individuals. This cryptocurrency is also the most popular of its kind. Cryptocurrency: This is a term used to describe any digital currency that, just like Bitcoin, is used peer to peer and has no central bank. Cryptocurrency networks keep track of all transactions to ensure individuals and investors don’t renege on a deal. Peer to Peer: In a normal financial transaction between two individuals, money is typically transferred using a bank as a third party to complete the transaction. In the Blockchain world, there is no middleman, and individuals make direct ‘peer to peer’ transactions using technology, to cut out the need for a bank. Smart Contract: A contract agreement that, once signed, cannot be altered. Normally a contract would be drafted by a lawyer and the parties involved agree and sign. Smart contracts are programmed and will perform any specified actions or enforce penalties as they arise. This technology allows room for less miscommunication between two parties.

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