ICO development can be expensive, and launching a full scale project is really demanding when it comes to resources – you have to gather a team, build the whole IT background, take care of the legal issues and manage a big scale promotion to reach the investors. That’s why many companies decide to support their offering at the very beginning with a presale, or pre-ICO.
What is presale?
An ICO Presale is like an initial, small scale round of investment. It is often private, and means selling initial tokens to a closed group of investors with a considerable discount (up to 50%).
On one hand, it’s a way to gather found for the full scale campaign for your ICO and improve your cash flow, but on the other hand, it’s a way to test the market’s attitude and is a low-cost check if investors will be interested in acquiring your tokens.
>> Preparing Your Company For ICO
Technical details of Pre-ICO
To launch Pre-ICO, you obviously need to have a finished and audited Smart Contract. The presales usually start no earlier than one month before the main offering.
The best choice in most of the cases is to have a separate smart contract to sell tokens in the presale. It draws a clear line between this and the next stage, and will be useful in the future.
In the end, a presale is a small scale Initial Coin Offering. We mentioned that you can treat it as a test, but it’s a test that you need to be 100% prepared for – any failure during this stage will undermine your credibility, and can sink your project.
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