First thing to consider when investing in an ICO — Team Composition
The year of 2017 saw a massive rise in the amount raised through ICOs (Initial Coin offerings). About $5.6 billion was raised in the whole of 2017 according to reports by Fabric Ventures and TokenData. A joint report from consulting firm PwC and the Swiss Crypto Valley Association shows that between January and May 2018 alone, in total, 537 ICOs with a total volume of more than $13.7 billion has been raised., the average size of an ICO has almost doubled from $12.8 million to over $25.5 million since last year.
The average investor got 82% return by investing in ICOs based on research report published by the Boston College Carroll School of Management May 20, 2018 based on data extracted from 4000 ICOs.
Although there are many factors to consider while investing in an ICO, in this article, we will focus only on the first key factor : The Team
Finding out everything you can about the team, especially the development team and the advisory board is crucial. It is advisable to look up each team member for relevant experiences. This includes (but is not limited to) searching them on google and visiting their LinkedIn profiles. Popular and famous names among the advisory board of the project are always a strength. Find out if the team has any crypto experience and more importantly — in which projects, or ICOs, they were involved with and the impact they had.
Linkedin profiles, even if they only rely on declarative information, allow us to see, for example, where the founding members of the project worked until now. Have they been in the blockchain space for some time or have they been in the circle just recently? There is nothing wrong with the introduction of ICOs by newcomers, but some caution is legitimate in a ‘gold rush’ context that attracts many opportunists.
GitHub profiles allow seeing which languages are mastered by developers, which is exciting information. A very active GitHub profile is not the best sign for the key developers of the project. Conversely, an active profile, which has been around for some time, inspires more confidence.
Twitter accounts can be fascinating to browse for points of interest, viewpoints, connections, and founding members of the project — and watch their evolution over time. Do they post on blockchain topics for some time? What do they post? With whom do they exchange information (publicly)?
It is not a question of rigid reasoning on each of these elements (the absence or the non-activity of a Twitter account, for example, is not crippling!), But the sum of these checks put at the end allows us to draw up an overall picture which is itself revealing.
