Using the three tier system is good for both the ICO team and participants because of what I like to call “need and feed.” The main reason why an ICO team uses multi-offers falls under “need”. Many ICO’s are startups without the mass availability of funds that we usually associate with cryptocurrency. The teams behind crypto are usually passionate, young people with minds for technology. This means many of them are downright in the negatives when it comes to personal funding. They “need” money and funding. Their need is amplified during the beginning of the project by a very short time span and large amounts.
This is where the private sale comes into play. The private sale is the first round of coin offerings, usually only available to angel investors and investment firms. A client of mine, whom we picked up after their private sale, received 10 different investments of 50,000 USD each. The fund acts as the development team’s living expenses as well as money to hire services out of their scope. With the private sale investments, the team can now spend a majority of their time developing, and delegate marketing to others. The investors benefit from the private sale in that they get first dibs on a potentially new billion dollar company. They are also incentivized by incredibly bonuses, which can sometimes match their investments by 100%.
This is where “feed” starts to become important. The company now has funds to “feed” into their other ventures. They start heavily advertising for their main sale, and if they are a good company, their platform. It is during this time where ICO’s will reach out to Forbes and Influencers for placements. After spending money on whitepaper development, legal issues, and their platform, the team once again has to find additional funding. This time they will look at the community and their potential clients for the money. This is called the pre-sale.
The pre-sale is the world’s first opportunity to purchase a company’s tokens. A good project will fill up their presale list quiet quickly. This again gives the team additional funds that they can “feed” into their company. At this point, the dev team will polish up their platform development and get ready to go live. They will have a completed whitepaper and will have gone through a couple rebranding moves. Bounties and airdrops become more common as the project enters its final weeks before the main sale.
The main sale is what is widely known as the official ICO. Main sales open up a company’s tokens to the world and make it widely available. While a successful ICO doesn’t guarantee a successful company, having a successful crowd sale heavily increases your chance of surviving currency death. You are much more likely to become a top tier coin if you have a lucrative ICO. On the other hand, it is important to note that many ICO’s that sold out have turned out to be scams.