Launching a successful blockchain and crypto project is extremely difficult. At the most fundamental level, a new project needs to get each of the following 4 components right:
- Great idea
- Team capable of executing the idea
- Funding to build the idea
- Community to drive and sustain the idea
So, you have this great idea and the foundations of a great team, but you don’t have the money to turn your idea into reality. You create a pitch deck, maybe even write up a business plan and begin presenting your idea to potential angel investors and venture capitalists. In return, they take a significant share of your token supply. You spend the newly acquired funds expanding your team and developing your product. You may need to secure a second-round investment and relinquish more token supply.
The main problem isn’t necessarily the number of tokens that you sold at a heavily discounted price, but rather that these tokens are held by very few people, and they are usually seeking a return on their investment, often at the earliest possible opportunity.
With funds in hand, your marketing efforts begin, influencers jump on board in exchange for more of your tokens, the community grows and the public token sale goes live. The community pays full price for the token as the early investors and influencers plan their exits, working against the best interests of the community and the project.
The early investors and influencers are happy because they made a significant return, but the community becomes restless when the expected gains don’t eventuate and the token price stagnates and the situation worsens if there is a sell-off and dump.
Projects have a much greater chance of succeeding when the interests of the project, the investors, the influencers, and the community are tightly aligned and dialed in from the very beginning. The chances of the project succeeding significantly increase when the investor is the incubator, and the influencer with an existing, large and engaged community already in place that approved the project investment beforehand.