NSL’s Executive Producer-Style Approach
Hollywood movies are brought to global audiences through a process wherein a movie studio selects the most promising movie scripts and concept pitches from numerous candidates. For those scripts or concepts chosen, the studio pulls together the best available ensemble of talent for the particular project, building up the buzz and momentum about the project, with the aim of producing, marketing and distributing a movie that has the chance of erupting into a blockbuster. NSL pursues a similar studio Executive Producer-style approach (more traditionally described as the general contractor and manager of the overall Token Sale Event) for the planning and execution of token sale campaigns on behalf of its clients. In the case of token sale campaigns, the “ensemble” is comprised of service providers including Specialist Advisors, Legal, Marketing, PR, Engineering, Security, Roadshow Management and Market Management all of which must be effectively orchestrated to execute a successful Token Sale Event (TSE).
NSL has partnerships with, and association or access to, some of the pioneers, experts, performers and stalwarts in the emerging Digital Economy driven by the rise of blockchain, cryptocurrencies and token sales. Having such access to uniquely experienced talent and operators in the token world is akin to having access to the top actors, script writers, directors and financiers in Hollywood which, together, can build momentum for a successful movie release. Accordingly, NSL works within a flexible compensation structure enabling it to attract and recruit the most experienced and effective subcontractors largely on an incentive basis.
The Six Phases of a Token Sale Event
A robust and effective TSE generally progresses through six phases, typically incurring USD 400,000-700,000 in expenses for a utility style token and taking between three and nine months to complete. In cases in which the client does not have an internal budget to initiate the TSE, NSL may advise clients on how best to solicit capital from its network of friends, family, advisors, supporters and angel investors including what kinds of deals can be structured. The six phases of a TSE may be described as follows:
The first phase, the Venture Development Audit & Token Concepting phase, is a mixture of venture development auditing and product strategizing that culminates in the detailing of a token that best fits the client’s business and capitalization requirements as well as the demands of the token marketplace. This will also include NSL’s review of the assets and service providers the client may already have available. Having broad experience in technology venture development as entrepreneurs themselves, the NSL team will provide reviews and recommendations in the areas of product and IP strategy and strategic business development. This phase may be completed within a 1-2 week period, centered on 3-5 days of in-person meetings, and will culminate in the development of a Preliminary Project Plan for the client’s TSE. A go-forward budget may be estimated against this Preliminary Project Plan and, on the basis of all the findings above, NSL and the client can mutually determine the best path forward for the TSE.
If the parties mutually agree to execute the TSE, the next (second) phase of the TSE will be commenced. The second phase of the TSE focuses on sourcing the capital required to run the other four phases of the TSE. Typically called the Token’s Private Pre-Sale (PPS) phase, this 2 to 16-week period is spent soliciting and closing initial token purchases from early contributors who are known pioneers, performers and stalwarts in the TSE, digital currency, blockchain and venture investment arenas. The PPS is the least restrictive phase, as early contributors reasonably expect that the details of the TSE—in the form of a White Paper and presentation deck—are still being finalized. Their confidence to invest at this stage is largely based on the quality of the proposition and the confidence-building recommendation of NSL.
The twin goals of the PPS phase are:
- to shore up sufficient capital to cover the expense of executing the remaining four phases of the planned TSE, i.e. to get the TSE into a self-financing situation, and
- to recruit a credible and capable ensemble of service providers and advisors for the TSE.
The PPS phase usually offers the early contributors tokens for sale with a healthy bonus (e.g. between 25% and 60%), is considered an insider round of token sales, and publicity is limited to a “whisper campaign” wherein outside parties are invited to sign up to be notified when the PS phase opens. A PPS phase that gathers over USD 600,000 in token sales and recruits several key advisors and service providers may be considered successful.
The third phase of the TSE is typically called the Pre-Sale (PS) phase during which all documents, marketing materials, detail plans and initial token developments relating to the TSE needs to be completed. During this 2 to 12-week phase, the TSE is narrowly publicized through titbits of information designed to gather increasing interest from a wider token buyer audience and close additional service providers and advisors. During this phase, tokens are offered for sale along with a tiered bonus structure (e.g. between 5% and 40% bonus rewarding the size or timing of the sales), and a successful PPS aims to raise from token sales between 25% and 67% of the TSE’s total capital raise target.
The fourth phase is the Public Sale phase wherein the TSE executes a full market launch and the tokens are offered for sale to all eligible purchasers on multiple digital exchanges. This phase, which may run between 2 and 10 weeks, sees the coordinated culmination of all marketing and publicity maximizing the public exposure of the token sale, with the goal of selling out the entire TSE token allocation.
During the Public Sale phase, NSL and the client will cooperate to execute key activities including:
- Management of the TSE Event.
- Special bounty campaigns.
- Community Management via social media channels.
- Continued public relations, social media and marketing campaigns initiated during the PS phase to maximize outreach and positive exposure of the TSE to the target token buyers.
- Security and Technical Support.
The fifth phase is the Post Public Sale phase which covers the time that tokens are issued to the token buyers to the month that ends the final token lock-up period, e.g. when the clients’ management tokens are released for trading on the digital exchanges (typically 3-6 months from the start of the Public Sale). In this phase, the full TSE allocation of tokens are distributed, the capital raised is expended in strict accordance with the client’s declared “Use of Proceeds” plan (publicly declared in the White Paper), and the company concentrates on the management of the token-holder community through its social media channels. Apart from complying with the terms of the TSE, the client’s goal during this phase is to ensure that the perceived value of its tokens may be sustained and, ideally, grown. To this end, NSL will engage the services of a Market Maker whose job it will be to help mediate the size and volume of token trades to protect and enhance the token’s value on the open market.
The sixth and final phase is the Post Token Sale Event phase during which time the client, along with the Market Maker, proactive token holders and the NSL team, work together to grow tradable value of the tokens. For the client, this phase is likely focused on exploiting the advantages of having raised significant capital, and gained significant market exposure, from the TSE campaign. The client will likely still be holding a significant number of tokens in treasury which could potentially be judiciously released into the market in one or more secondary capital raising events.
Overall Duration and Timeline for a Typical TSE:
TSE durations can vary widely but, to set expectations, they are typically run as follows:
Phase 1 Venture Dev. Audit & Token Concepting: 1-2 weeks.
Phase 2 Pre-Pre-Sale: 2-16 weeks, until the TSE funding is raised.
Phase 3 Pre-Sale: 2-12 weeks.
Phase 4 Public Sale: 2-10 weeks.
Phase 5 Post-Public Sale: Until all lock-ups time out (e.g. 6 months).
Phase 6 Post-Token Sale Event: From the end of Phase 5 onwards.
Each of the six phases could be done faster or slower depending on the effort required to raise the funds for the TSE, the complexity of the token design and the TSE plan, the size of the raise, the regulatory and legal challenges of the TSE, the type and size of the target audience and token buyers, and other such variables.