4 Crucial Points for Evaluation of Investments in ICO
An Initial Coin Offering (ICO) is a mode of fundraising which trades cryptocurrencies of the future for current cryptocurrencies that possess quick and liquid value. Typically, a certain percentage of tokens are sold to participants of ICO while another part is kept for needs of the company.
An ICO permits both small and big investors to fund projects liked by them. Recently, there are many stories of hundreds of successful ICOs. Thus, it obviously motivates investors for projects. This motivation arises because the current price of the token is many times higher than the price of the token during ICO.
Crypto investors are really fond of ICOs, but ICO success is impacted by many aspects. Sometimes, ICO is impacted by fraudulent practices like hacking.
Thus, ICOs are a risky way of fundraising. Do not invest any amount which you cannot do without. Remember that because of lack of regulation, it will be tough to regain investment in case of failure.
Here are some key points to consider while investing in ICO:
1 Composition of teams
Discover all you are capable of, regarding the team; particularly, about advisory board and development team. Consider the relevant experience of each team member. Do a Google search on their names and visit their profiles on LinkedIn. Check if there are any famous names on their project advisory board. Check if the team has any experience with cryptocurrencies.
2 Thread of Bitcointalk.org
A good launching pad is the announcement thread of project on BitcoinTalk.org.This site is the largest forum of Bitcoin and other crypto connected issues. You must read all messages carefully. In this thread, concerns of investors will be addressed. A negative sign is when developers refrain from answering some questions and will not co-operate. It is a good idea to send them a personal message to ascertain how responsive they are.
Every message on Bitcoin includes activity degree and rank of the sender. Steer clear of low-ranking writers and newbies. A significant factor is reputation. Look out for comments by experienced writers and also, negative messages.
3 VC investment and stage of project
Assess the stage of the project. Does it possess simply a white paper? What about a beta version? Go for projects that have some lines of working code. But take note, many ICOs have tasted success without any written code.Venture capitalists or VCs tend to support projects at early stages. Search for such information on the main page of the website of the project.
4 Media and community
An important factor to have is an extensively open community for support. It is crucial to have an openness to gain trust as the Github code. You must endeavour to understand the community’s atmosphere. Consider the activities and size of the community.
Social media sites like Facebook or Twitter may be important while assessing the project. Take note of Bounty Posts. A common procedure is to give a reward of bounty thread to those, who disseminate positive vibes about the project to raise media coverage or aid in translations.
These are all some crucial aspects of investing in ICOs.
