There are a lot of market opportunities waiting to be explored, making today the best time to start a new business. The market opportunities aren’t the only appealing thing about today’s market either. There are also plenty of resources to help you start a new business, plus you have the lean approach of modern startups to adopt.
Still, starting a new company comes with some challenges to solve, including funding-related challenges. To help you solve that particular set of challenges, we are going to take a closer look at how you can fund a startup with cryptocurrency in this article.
Understanding the Basics
Before we talk about how you can use cryptocurrency as a source of funding for your new startup, it is important to understand the basics of using cryptocurrency for your startup funding. Cryptocurrency has always been positioned as a substitute for conventional currency. Its decentralized nature makes cryptocurrency relatively neutral from external influence.
The value of cryptocurrency is tied to an anchor. In the case of Bitcoin and most other coins on the market, that value is tied to computing power needed to produce coins. As that computing resource becomes scarcer due to the higher requirement for producing a coin, the value of the cryptocurrency becomes higher.
Today, that crypto value is also tied to external factors, including market cap and sentiment. You can use Coins.live, which acts as a cryptocurrency tracker listed by market cap, to stay up to date with changes in prices and values. As you release your coin to the market, its value will – sooner rather than later – be defined by the same external factors.
Crypto as a Source of Funding
Yes, you can release your own coin to the market, usually in the form of tokens. To do that, you need to tie your new coin to the product or service you are launching. Alternatively, you can tie the value of your coin to the value of your company.
If the former is what you want to do, then you need to deliver value by introducing a mature and attractive product idea. Unless potential customers are excited about your products, it will be difficult to increase the value of your coin.
The same is true with product delivery. If you fail to deliver the promised product or benefit, you will see the value of your coin tanking in the market. That’s never a good thing for a new startup, because trends like this influence investors more than you realize.
Your Own ICO
Thanks to the popularity of cryptocurrency and tokens as sources of funding for new startups, you no longer have to do everything from scratch if you want to adopt this type funding. There are service providers – companies that help other startups do ICOs for funding purposes – that can help you handle the A-to-Z of releasing a new cryptocurrency.
You don’t even have to develop your own blockchain network, since you can now tap into existing networks used by other startups for their own ICOs. This means you can focus on what matters: developing a product or valuable proposition that will excite the market enough to invest in your new startup.
To boost your ICO early, utilize digital marketing and run an effective campaign that targets potential investors. Targeted marketing campaigns are far more effective than campaigns designed to reach everyone, simply because different audience segments consider different things when making investment decisions.
With a reliable partner helping you with the execution, running an ICO is easier than you think. Cryptocurrency as a source of funding is more accessible than ever, so you know you can fund your new startup with the right investors buying into your new coin.