These days, a blockchain A startup founder must expect to navigate challenging waters. Even in the best of times, founders need to prepare for both a bull market and possibly bear territory.
Having a solid roadmap, real-world use cases, and a war chest are only a small part of a blockchain startup’s survival strategy. Founders should also be aware that while non-cryptocurrency startups can offer useful and transferable launch strategies, the road to success in the blockchain industry is paved differently.
Here are some tips that every blockchain founder should keep in mind before launching.
Take market conditions into account
Bear markets seem more attractive to blockchain companies looking to launch. But before preparing for winter, founders need to assess whether it’s worth waiting to launch until market conditions are better.
In the web3 world of horizontal technologies, you will be running against the wind if you wait to build relationships until you have built a technology.
Evaluate your startup using the same criteria that investors use during a bear market. Investors want to see a solid roadmap with timeframes and benchmarks that don’t just ebb and flow with no activity, as this is a signal to investors that a slow rug pull is underway.
Evidence of a diversified war chest that you can draw from is critical, especially when providing returns on locked-up assets is the primary impetus for achieving liquidity. Also, analyze the market situation from a technical point of view: the bear market is an attractive time to launch, but it is also a time to head down and focus on building your product.
Regardless of market conditions, take advantage of its rewards programs for loyal community members by offering staking rewards, airdrops, and giveaways without the need to raise additional capital, similar to the traditional business world.
Opt for longer vesting schedules
In the non-crypto startup scene, it is common to include compensation packages as an incentive for employees to perform well. Blockchain startups do this during the presale period of an initial coin offering using a method called an acquisition, where they lock and release assets (usually in the form of tokens) for a set period. By doing so, they entitle their team, investors and advisors to certain assets, such as retirement and stock options.
If you choose this path, configure the token metrics and grant period for the gradual release of these tokens in a way that doesn’t put too much pressure on the token itself. Many crypto projects unlock and distribute their tokens every three months, finding private investors who dump them on the market, which is bad for the team and the community. In turn, retail investors also start selling early because they know a crash is coming.
Opt for longer award timelines, between three and five years, to demonstrate that you have a financial incentive to continue development of the project. Split Token Release: Release Private Sale Investor Tokens one month, Advisor Tokens the following month, and Team Tokens one month after. If it’s all in one month, the risk for retail investors will be too high.
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Source: news.google.com