4 reasons this ICO is a bad idea
- They are not solving any problem
Almost every ICO is targeted to decentralize a certain industry, product or service but are they actually targeting to provide a solution to an existing problem or they are just fixing what’s not broken? Ever heard of the phrase “What works for some doesn’t work for others”? Just because a decentralized platform works in a certain industry or product, doesn’t mean it may be essential for yours. What exactly are they raising millions of dollars for again?
2. Uncertainty in plans for post ICO
$2 million, $10 million, $80 million, numbers aside, exactly how are the ICO funds going to be spent? Are they making empty promises? Do the plans sound too good to be true? Vague claims such as “Marketing expenses” or “Product technology” just won’t cut it.
3. Sketchy team members
The entire team’s bio has titles like “ICO Enthusiast”, “Growth Hacker”, “Cryptocurrency Evangelist” or worse, “ICO Influencer” with a 10,000 following, of which 80% are bought and has no real experience raising funds or growing a startup. Even the best business ideas or plans are thrown down the drain without a credible team with solid credentials. Anyone can make claims to be an “ICO Advisor” but are these ICOs legitimate?
4. Fancy whitepaper with no clear outline
Anyone can create a whitepaper these days. With online freelancers offering services that cost as little as $50 to do up a 10-page whitepaper, how difficult is it really? Fancy whitepaper uses the “if you can’t convince the target, confuse” approach, with the technical aspects of the platform or token function being too profound for the average non-technical person to understand. Should I be putting my money into something I have no idea what it is about? The token distribution model states that 40% of the tokens will be distributed to the team. Really? The average ICO round-size in 2017 in Asia was USD$30.7 million and 40% of that is USD$12.28 million. The average Lamborghini Huracan costs USD$598,000 in Singapore and I could purchase 20 units of that. Exactly why do you need that much money again?
Then again, don’t let one rotten apple spoil the rest (although it clearly isn’t just one), just do your due diligence. Regulators are slowly stepping in to protect investors from unethical or fraudulent ICO fundraising so in time to come, there will only be stricter rules and regulations hence the reduce of seemingly “scam” ICOs.
