In recent days, crowdfunding is becoming more popular. The most prominent crowdfunding strategy is the Initial coin offering (ICO), which offers crypto tokens in exchange for capital to raise funds. To launch a successful ICO, you need to partner with an ICO development company to execute ICO launching processes. There have been many confusions on Pre ICO, ICO’s.
In this blog, get to know about ICO, Pre ICO’s, and how pre-ICO and ICO differ in fundraising.

Overview of ICO

ICO and IPO are similar in raising capital funds but quite different from while it gives the investor crypto tokens/coins in return for investments. In the future, cryptocurrencies, blockchain might be the next boundary in the finance industry.

ICO process:

When the company decided to launch ICO for fundraising, thorough research and evaluations are needed. Next, it should be White paper creation that outlines the venture details. Once the whitepaper is developed, the ICO Website designing, token evaluation & development, smart contracts development, PR & marketing occur.

Fundraising will be conducted in 3 stages,

  • Pre ICO

ICO pre-sale is also known as Pre ICO, a token sale event that occurs before crowdfunding. The tokens/coins are offered in returns for investments to limited private investors.

  • Ongoing ICO

Once the pre-sale is completed, the crowd sale will take place. The tokens /coins are distributed to the public for their returns in investment.

  • Post ICO:

The post-ICO is the final part of conducting an ICO Campaign. The main objective is to deliver value and the final product to the customers.

How does Pre ICO sale work?

In pre-sale, the tokens/coins are distributed to a small number of investors at smaller prices with a substantial bonus. It allows investors to receive tokens/coins at discount prices. In the initial stage, the token value is lower and rises after its demand increases. The primary motive in performing Pre ICO is gaining investors’ attention and consideration. Separate smart contracts are used for Pre ICO and ICO to avoid distinguishing funds obtained from ICO and Pre ICO offering.

Difference between pre-ICO and ICO

The significant difference between ICO and pre ICO are given below.

  • Limited Investors:

In Pre ICO, tokens are limited to a small number of private investors as compared to Crowdfunding.

  • Token supply:

Tokens are offered at discount prices to limited private investors. A limited amount of tokens can be purchased with the returns of investments.

  • Pre ICO fundraising:

The funds collected during Pre ICO period will be helpful to launch the crowdfunding sale.

  • Tokens at discount prices:

The tokens are distributed to investors at discount prices. The discounts and bonuses depend upon how early into the round they invest and the investment amount.

Pre ICO Advantages

  1. Pre ICO sale offers possible concession on tokens to investors.
  2. A token sale is assured, as some ICO might cancel the crowdsale.
  3. Possibility of acquiring more tokens as compared with ICO since presale is limited to greater financial specialists.
  4. Possibility of quick returns on investments if ICO coins are purchased at the concession and sold immediately when exchanging starts.

Conclusion

This is all about Pre ICO and its advantages. If you have any idea in ICO creation, consult a Blockchain Firm to implement successful ICO’s smartly to raise your business funds.