What is Pre-ICO Token Sale and What Do You Need to Know About It?

What is Pre-ICO Token Sale?

Pre-ICO or ICO presale is the token sale event that blockchain enterprises before the ICO campaign or official crowd sale goes live. A pre-ICO token sale allows investors to buy tokens before the official crowd sale begins. Most of the times, these pre-ICOs raise a much smaller amount of money and offer tokens at a lower price with a considerable bonus. The project should maintain complete transparency about the tokens and inform their strategy to their investors. The two main criteria of transparency related to the presale of ICOs are:

  • Who gets the token (and how much of them)
  • Lockup period for the company and insiders

The fund-raising targets for Pre-ICO token sale are lower than the main ICO, and the token is sold at a much cheaper rate in the beginning. Depending on the market strategy of the ICO they can specify a particular timeline for the sale of pre-ICO. Usually, there are two to four stages of pre-ICO sale list. In the first stage they are sold at 75 percent off for a few weeks, or a month, later it can decrease to 50 percent, 25 percent, and so on.

What is the Aim of Pre-ICO?

The pre-ICO campaign aims to acquire angel investors who buy their token before the official crowd sale program. The funds raised through presale of ICO can constitute up to 10 percent of the hard cap which enables the company to build infrastructure while simultaneously working on its roadmap and whitepaper.

However, there is one drawback of ICO presales. Early adopters or investors dump their tokens as soon as they are tradeable on exchanges. So, this way they earn a substantial profit by selling the token at the main ICO price while they bought it at a discount rate. Due to this the value of the project token takes a downward hit.

What are the Benefits of Pre-ICO?

To avoid the mixture of pre-ICO funds with the main ICO, pre-ICOs use different smart contract than the one used in the main ICO event. This enables smooth and proper account reconciliation and audit. Several projects run a pre-ICO token sale to accrue funds to finance the expenses incurred on launching the main ICO. Some of the costs required to whip up investors’ interest are paid promo ads, meet-up costs, and strategic recruitment.

This is the reason behind the popularity of pre-ICO and ICO among blockchain investors. If you are thinking to set up an initial coin offering campaign, then it is advisable to consult a blockchain expert who can provide the right path towards success. ICOdevelopement.io offers blockchain consultancy, and it guides till the entire process of pre-ICO, ICO, and post-ICO which helps the company to raise sufficient funds for its blockchain project.

As a leading ICO Development company, we specialize in the pre-ICO Token service solutions that are trustworthy. For more information or queries visit at ICO Development.io and know more about this technology. You can also contact us or send us an email at sales@icodevelopment.io