The Ultimate ICO Investor Cheat Sheet

5 min readJun 5, 2018

How to Choose the Best ICO to Invest In

Nowadays, many investors are seeking new ways to contribute their funds profitably. As technology is developing rapidly and blockchain represents the new era of opportunities, it comes as no surprise that investing in cryptocurrencies and ICOs is one of the hottest topics.

The rise of ICOs is the newest trend for both startups and investors, though authorities haven’t stopped warning that contributing funds to ICOs is very risky. Still, the idea of winning a fortune, investing less, and profiting more is so appealing that it just can’t stop investors. And it shouldn’t! In order to avoid scams and fraudulent or manipulative projects — and recognize low-quality campaigns in advance — there are a number of features to evaluate.

Here is a cheat sheet for investors which will help determine the strong sides of an ICO so you can decide whether it is worth investing in!

First, investors should check the project of interest in accordance with the following signs:

If you see that the ICO is pretty popular (the more hype it has, the more attention it has drawn in the community); the token price is moderate and the coin solves various problems; and team developers are strong and experienced, then you can start doing your profound research on the project.

Where to start?

Project Idea

This is the first and most important issue to evaluate. The idea behind the project has to be significant for the community, and solve a certain problem. Is it a product that will be really in demand, or a service that will help perform certain tasks and increase efficiency in a given industry?

It is important to ensure that not only is the project idea great and promising, but also that it benefits from blockchain usage. Here, one should see that the ICO concept really needs to run the fundraising campaign to achieve its goals and provide secure, decentralized data storage as an outcome.

White Paper

The white Paper is an itemized, structured document that defines a project’s architecture and the technology aspect behind it, outlining the issues it solves. This is the most important document, as it mentions all aspects with which you need to become acquainted before investing.

The main requirements that must be complied with are:

The white paper should be written comprehensively, and provide a thorough, well-structured, reasonable explanation for the company’s goals.
A clear definition of the project should be provided, along with pertinent challenges, opportunities, and outlined solutions.
All technical information should be provided: smart-contract description, DApps workflow, platform architecture, and a detailed explanation of how it works, product proof of concept, etc.
Legal aspects are stated and explained according to applicable jurisdiction requirements.
The value proposition should be clarified.
The roadmap illustrates milestones with clear, specific dates, and tightly matches the business development steps. It includes a viable budget plan and marketing strategy.
The paper provides full information on team members.

Funds and Token Distribution

As soon as you find out more about the project and its goals, challenges, and solutions, it is time to research funds and token suitability.

The token is one of the determining features of ICO success. If you see that the company token can be used in this project but isn’t really necessary or does not perform any additional functions, then something is wrong. Therefore, it has to:

be necessary and functional (needed to process payments and operations);
have the ability to be exchanged or traded later for another cryptocurrency;
be used in rewards systems for token-holders.

In addition, it is important to ensure that token-holders have control over their funds and take part in project decision-making, voting processes, etc.

Funds should be held under proper control. It is crucial to check that funds distribution is strictly complied with. A refund option should also be provided in case things go wrong. This proves the seriousness and responsibility of the company. Don’t forget to check for bounties and rewards.

Another important thing to mention is that soft and hard caps should be set reasonably. The price shouldn’t be extremely high; it should be wisely calculated to achieve product development goals.

When you decide to invest in an ICO, consider using the Bdaq trading platform, as it allows buying and selling of tokens even before they are listed on exchanges.

Social Activity

Another aspect any investor should research is social activity. To promote a product or service on the market, the company must provide all clients, supporters, and investors with current development information, company news, and updates, and do AMAs to answer any possible questions. A large number of social networks proves that the company does its best to keep in touch with its clients. Furthermore, check to see if the team is quick to respond, or whether it responds at all. The most popular social networks and blogs are Facebook, Twitter, LinkedIn, GitHub, Reddit, Telegram, the Bitcoin.org thread, Medium, etc.

Check the company’s website. It should include all information about:

the company
the team
documentation
current news, updates
blog posts

Team and Partnerships

To run an ICO successfully, team members should:

be proficient and reputable in blockchain technology
have successful previous experience
be reachable and responsive in communication channels

The team should have experts in various industries, such as marketing, legal, development technologies, community managers, etc. Another significant detail is to check the company’s partnerships. Here are some questions to consider:

Does the company partner with other entities? Are they established or registered?
What’s the goal of this partnership, and what benefits does it provide?
Is this partnership confirmed by both participants?

ICO Ranking Sources

At this point, we have mentioned the most important features to evaluate. Though you might wonder — how can I rate or evaluate the project if I am not an expert?

Thankfully, there are many experts eager to share their knowledge and opinions on various ICOs. To help you find answers to the above-mentioned requirements, the following list of rating sites is offered:

In conclusion, it must be stressed that though investing in startups can be exciting and profitable, there is no need to rush. Take your time to carefully research the project, and invest wisely!