The era of Moms doing ICOs has arrived
When I attended a consensus in this year, I was approached by a woman around my parents’ age who said, “I am going to do an ICO.” Just in case anyone doubts me here, this really is a true story.
After that happened, as I was thinking “the day when mothers are doing ICOs must be quite soon,” after returning to Japan I quickly began talking in various places about how “when mothers start talking about doing their own ICOs, it might be time to be careful.”
That has become a reality faster than I thought it would. It has truly become the era when moms come to ask for advice regarding ICOs. If your mother came to your place and asked for advice, you must give advice so that she does not conduct fraud without intending to do so.
Anyone can gather capital or financing to offer an ICO. For the one gathering capital there is the possibility of conducting fraud without intending to, and for the one supplying capital, there is the possibility of getting scammed. Therefore, if your mother says that she wants to carry out an ICO, you must be careful. There are five critical checkpoints for taking due caution. Let’s go through them one at a time.
1. Mom, do you have a whitepaper?
The first thing that you want to check with your mom who is thinking an ICO is whether or not she is writing a whitepaper. If you have a good fortune that something has been written, firstly read its contents and try to understand it. It’s important to see if the whitepaper has proper contents, to begin with. Check the aim of the project, how tokens are allotted, about how much capital is being sought, and if the scheme doesn’t have any legal problems with it. Properly writing these things is a surprisingly tall hurdle. Finally, if there is only a whitepaper in Japanese, you should advise her to get it translated into English and Chinese.
2. Mom, what will the tokens be used for?
Check with her what is the intended purpose of the tokens. If she is planning on issuing the tokens and then selling them, then check what the use the tokens would be and otherwise what benefits are there for people who purchase the tokens. Simply distributing tokens that have no purpose would not lead to a successful ICO, and there would be no reason to have an ICO in the first place. Insist on verifying the utility of the tokens and what benefit the tokens would serve to those who purchase them.
3. Mom, who is your advisor?
Please ask who is her co-founder and who are her advisors. If it’s your father, then resolutely reject her plans. The ICO should be stopped. The co-founder and advisors are extremely important to the ICO. This is because an ICO project is a declaration that states, “I am going to start something big!”, and gathering supporters to realize that project.
To determine whether that person is trustworthy for that project and capable to give shape to your idea, the best resource would be the person’s past credentials. Without any experience, it is difficult to make a decision of purchasing tokens, so the ICO won’t go well. If a person has experience as a co-founder or an advisor, that may be a good sign.
And the key to a successful ICO is having members committed towards the Startup project. If mom is not an engineer, the number of engineers is very important too. An ICO without an engineer is like trying to build a house without a carpenter. Although, if the project is not technology driven, this may not be the case. However, if you are going to utilize Blockchain, engineering skills are necessary. Check the ratio of engineers in her team.
Another important point. If Vitalik is on the list of your mom’s advisors, be careful. You may want to cut ties with her altogether. You should only hire an advisor if he/she agrees to the terms. Using their name is not enough. The advisor should contribute something to the project. There are many cases where someone’s name or pictures are used without permission on documents. You can assume such projects are bad news. If you find out your mom is doing things like these, stop calling her your mother.
4. Mom, where will the tokens be sold?
Where to locate the business entity and where to issue tokens, and if it will be sold or not are also important points. Depending on that choice, things that should be checked like laws and taxes can differ. Which country does she want to have the ICO and what countries’ peoples are intended to be purchasers of the tokens? These are important points to clarify as well. As this will cause major problems if there are any mistakes in the plan, make sure to clarify who issues the tokens and where those tokens will be sold. If the ICO is going to take place in countries like the U.S. or China, both with existing regulations, I suggest you stop the ICO at all costs.
5. Mom, do you really need an ICO for that?
Many projects in the world have no meaning for an ICO. ICO is a new form of fundraising. By going through an ICO, things may get more complicated legally and in terms of tax laws. You may also face limits regarding how to use those funds.
Furthermore, you have to think about when you get too many funds. If your mom is already running a business and has funds from banks, loans, or investors, it may not be worth going through an ICO.
If she is thinking about an ICO as a simple method of fundraising, you may want to stop her. This is because an ICO not only raises funds, it notifies the world about the project. This means if you conduct an ICO for a project that does not benefit from such advertisement, you would only be increasing the costs of marketing and customer support. There is no need to get support from so many people from all over the world. If your business model is based on a small group of people, there is no need to get more people involved through ICO. If your business requires supporters from all over the world, then ICO might be a good move.
Is an ICO truly necessary? Is she just thinking about an ICO simply to raise funds? Check these points with your mom.
Preparing for your mom’s ICO
If your mom can answer these 5 questions and you decide the project is worthy of an ICO, your next move is to review the source code. Or, review the code written by your mom’s co-founder and see if the project has a realistic chance. Once this is decided, you may want to move onto more realistic things like the price of tokens and when to start selling.
If the project is already at this stage, and your mom can answer these 5 questions, she must have a community in Telegram, Slack, or Twitter. In other words, she must have her own supporters. Make sure to introduce yourself to that community and check if the project is moving forward. If she does not have such a community, the ICO may not be successful, even if she can answer these 5 questions. Advise her to take time to gather appropriate people at appropriate locations to build a community.
The era for your mom to do an ICO is just around the corner. In fact, she may already have something in the works…