The Appinop Blog

Initial Exchange Offering or IEO refers to the method of raising funds. IEO may seem similar to IPO (Initial Public Offering) that you may find in the stock market. In an IPO, a company trying to raise funds sells its shares/stock to the public. Similarly, in an IEO, an exchange scrutinizes the validity of the company/project that tries to raise funds. It also checks the necessity of the company to raise funds. The only difference is that in an IEO the company raises tokens via a cryptocurrency exchange instead of the stock exchange. Unlike IPO, IEO can cover the global market without having the limitations of timeframes or other issues. The most famous IEO remains the one organized by Binance, the largest cryptocurrency exchange in December 2017. IEO has become popular because it offers high returns on investment.

Why IEO?

Earlier, companies interested in raising funds through a cryptocurrency exchange used ICO (Initial Coin Offering). But, in the past couple of years, many investors have lost money with fraudulent ICOs. It has resulted in fear among start-ups in opting for ICO to raise funds. Different alternatives of ICO have emerged such as ITO (Initial Token Offering), IEO, and STO (Security Token Offering). Among them, IEO has proved itself as one of the best alternatives. It can raise funds in exchange for crypto-tokens. Here are some of the reasons why IEO seems like a better choice.

1. IEO follows specific rules of exchange that eliminate the possibility of fraud.
2. Third-party exchanges hold the responsibility of conducting IEO in a controlled environment making it trustworthy and reliable.
3. Only the members of the exchange platform can take part in the IEO.
4. The contributor or investor has to first send payment to the escrow (Exchange) account. The payment is verified by the exchange and processed after delivering the purchased tokens to the buyer.
5. Registering process of IEO seems a bit complex compared to ICO. Completing the registration as an IEO with the exchange means fulfilling the eligibility requirements posed by the specific exchange.
6. IEOs offer more security as a third party manages the complete process instead of the holding company.
7. IEO has another benefit that the exchange platform will list the token after the sale ends.
8. These are the main reasons why crypto investors and start-ups opt for IEOs instead of ICOs.

Steps To Launch An IEO Successfully

For launching an IEO successfully, you need to follow specific steps. These steps offer guidance to help you complete the process.

The Preparation Stage

The first step is to come up with a feasible idea. The idea you come up with must have a structure to meet the market demands and requirements. Hence, you need to assess the economic, financial, and social viability of the idea. The aim is to make your project better than that of your competitor. It is vital to devise a plan depending on the experience and understanding. To put the ideas to life, you can seek the assistance of experts with experience in crowdfunding mechanisms and blockchain space. They can provide a roadmap to depict different stages of the start-up as its growth. It minimizes risks and can make an attractive pitch to investors.

Draft White Paper and Select Exchange

Before getting listed on the exchange, you need to draft a whitepaper. It should match the requirements of the exchange. It is a crucial step and you need to take ample precaution. The clarity and scope of the whitepaper can lead to the exchange approving or declining your request. The whitepaper you draft also helps the investors make an informed decision. After drafting the whitepaper, build a website with all information regarding the project for future investors.

You need to select a cryptocurrency exchange for the IEO. The choice must depend on your specific requirement and feasibility. You need to read the terms and conditions of each exchange carefully to make an informed decision. Some of the popular exchanges for IEO include:

1. KuCoin Spotlight
2. Binance Launchpad
3. Huobi Prime
4. ProBit
5. Bitmax Launchpad
6. OK Jumpstart
7. Bittrex IEO

Registration And Approval on The Exchange

To launch the IEO, you need to complete the registration process. We have listed below some steps-to-follow:

Fill Application

After deciding on the exchange suitable for your demands, you must fill out the application provided by the exchange. Usually, the application available on the exchange is eight to ten pages long. You can get expert assistance to complete this complex process. After filing the form carefully, submit it to the exchange.

Review of the Application

The exchange reviews the application you have submitted. It is scrutinized and verified by the exchange team. Application review takes place on several factors. To avoid rejection, you need to maintain transparency and comply with the exchange guidelines.

Listing Payment

To list the IEO on an exchange, you have to pay a certain fee. After completing the process, you need to pay the fee. Apart from the fees suggested, you may have to pay a specific amount of share or interest earned from the proceeds of the token sale. Depending on the exchange, you can pay the fees one-time or in installments. The exchange offers assistance in deciding the offering price of the token to make it attractive to the investors. After establishing the stricture, the project becomes ready to get listed on the exchange.

Post-IEO Listing

Never take it easy after the listing of IEO on the exchange. You need to take steps to build trust and reliability among the investors. After listing the IEO, you need to take up marketing and promotion to attract attention to the token. You can opt for social media marketing, email marketing, blogging, and press release to convince the investors that the token can offer returns.

Cryptocurrency has become famous among people. With its evolution, more and more adopt it for their business. You can make the most of it using IEO. If you wish to taste success with the IEO launch, you need to associate with a reliable service provider. The experts can offer guidance in raising funds and help you materialize the vision with ease.