ICO is a novel phenomenon for raising seed funds. They’re based on the disruptive blockchain technology and are being pursued by highly innovative startups. It’s quite natural then that most companies opting for this method of fundraising are backed by a young core team. The entrepreneurs are largely inexperienced, and most are technology geeks. Their expertise is critical to developing the project, but not really to execute a successful ICO. Most of these teams lack expertise in critical areas of fundraising like legal, compliance, accounting and managing funds. So, having an advisory board has become an unwritten rule for companies with ICO ambitions.
An ICO advisor should be a guide, a person (or persons) who can help validate the feasibility of the business idea and take the idea from a vague concept to a full-fledged business plan. The advisor should be able to assist you with building the roadmap for the ICO, determining the amount of funds required and how the funds would be deployed.
The Most Common and Deadly Mistake Made
I’ve seen many young entrepreneurs seeking a highly experienced advisory team only to create the “wow” factor. Having industry experts backing your project would be great for your ICO, right? It does help to build credibility, but this should not be the sole objective when choosing your advisors.
A big name isn’t everything. And, it’s totally wasteful if the person has no idea of token sales or your industry. In fact, the growing popularity of ICOs has spawned a “market” for advisors, who lend their names and credentials to several startups, but don’t add the huge value that good advisors can. Remember that the main purpose of an advisory board is to provide sound advice. The rest is secondary.
This is not a quick decision. Allocate sufficient time for finalizing an advisory board for your company. And building a relationship between your management team and the advisory board will also take time.
Begin with listing the expertise you require, that your current team lacks. Also make a note of what you need advice on. The person(s) you invite to your advisory board should have expertise, experience and education commensurate with this.
Be thorough in your search. Google the advisor and check their LinkedIn profile. Find out more about the companies they’ve worked for and designations held. Check out if they’ve assisted other ICOs and how the ICO performed during and after the token sale event.
Have a clear idea of the reasons for selecting an advisor.
Think beyond the ICO. After all, when the funds are exhausted, your project would need to generate revenues. So, rather than crypto experts, your advisory board may need industry experts, who can refer your project in their network and help increase adoption. They may also help you network with other experts in the field, which is invaluable for the future success of your company.
Always consider whether you and your team will get along with the advisor. You need to work together; and you should be comfortable discussing various aspects of the business and whose opinions you can trust.
And, yes, now it’ time to leverage the credentials of the advisor to gain credibility for your business.
Remember, however, that advisors will not know everything about everything. Listen to advice; but implement it only when it makes sense to you.