Information inequality: the risks for ICO launchers and investors are at least equal

This publication is the first in a row from Nikita Anufriev, DateCoin CEO. He intends to shed the light on the problems, the crypto currency industry guru keep silence about, and ones left out of scope by the major informational platforms. These attempts result in imaginary cozy crypto world created, which shares the benefits of being fair and trustful. For the ICO launchers becoming victimized, losing funds and time, this article reveals the fraud schemes adopted at the ICO market.

Scam projects and scam experts

They suppose the investors only suffer from crooks, when facing to the scam projects regularly. However, for ICO launchers the situation sometimes is even worse, since they encounter multiple shady dealers specialized in scamming, who pretend to be capable of raising millions of dollars for startups. I’m not going to disclose the names being confident that those swindlers will be washed out by the market. If, by chance, the shady dealers skim this article, they can easily solve self-identification problem for the case.

DateCoin is about to launch ICO on March, 2018. DTC token Presale was successfully finished at the end of the last year. 18M tokens were sold and 2213.75 ETH was raised. Was it easy? Not really. Almost at the very beginning of this long and tricky journey, we faced to the group of shady dealers, who promised ‘mountains of gold’ and even had good reputation at the market. At first glance, everything looked great: juggling with unknown crypto industry terms, showing off business contacts with big investors and funds, and so on and so forth…To tell the truth, we were impressed; as the traditional business representatives, we have just heard about upcoming crypto boom.

Having paid a lot for ‘consulting’ and successful ICO promise, we appeared to be in trouble as the time was passing. In particular, for multiple tasks the deadlines were not met and several important directions were not developed at all. At the initial stages, all the fair remarks given to the consultants, were addressed in a way of not pressuring the professionals and taking it easy. With the cheeks blown, the consultants pretended to be slightly disappointed. As we further realized, this behavior agreed well with their plans of doing nothing. By the way, one of the consultants appeared to be ‘fallen pilot’, who hold several executive positions in Russian state agencies in the past, and now is actively trying to realize himself in crypto industry. One more ‘expert’ turned out to be involved in another 15 projects, not surprisingly paying no attention to ours. Moreover, he served as a commission head in one of well-known Russian industrial companies, and thus was hard to reach and unwilling to communicate. Timely problem solving was even not worse mentioning.

At some point, the affairs were in such a bad way (low quality, tasks not completed or even not started yet), that we lost confidence in launching ICO at all with those consultants. That’s why, as an IT-company, we decided to be on a safe side and worked on the key tasks along with our ‘contractors’. As a result, we completed almost all the tasks timely and were just slightly behind the schedule. It worth noting, that we could otherwise simply forget about the ICO.

After two months of tortures with ‘consultants’, we were strongly disappointed. Like many others, we were cheated when invited to attend quite expensive events with no outcomes. All we can get were lunches, not a single ether or bitcoin was raised. On the contrary, the consultants sucked the life out of us. BTW, instead of dealing with investors (with business connections pretended to have), they preferred to leave for vacation and enjoy surfing somewhere at Bali.

All mentioned above was just the tip of the iceberg. We are not willing to bother the readers with all the details, but claim with confidence that the risks for ICO launchers are even higher compared to investors.

Why? The investors risk their money only, whereas the ICO launchers — their business reputation, money and even freedom, not to say nerves. What is the reason? Information inequality. Investors get the advantage to access all the details of the project and assess its profitability. Moreover, all team members are presented in a White Paper, thus making it easy to check their business reputation. In other words, if the investor is concerned it is nearly impossible to attract him. On the contrary, checking potential contractors is very tricky, provided them being spoilt by the ICO market.

Things you need to know before picking consultants

The key problem ICO launchers encounter is to pick people and companies for legal and technical support, marketing. These are major directions, with many other not listed.

If the team for ICO has been built, additional staff is usually not hired, excluding charismatic personalities capable of leading certain directions. To carry out ICO, the full cycle agency is an ideal choice. It allows to save money and time (that can also be monetized). There is no need to look through hundreds of applications picking the best candidates to further build an effective team.

In our case we were lucky, because even though the agency failed to meet our expectations, we still found several experts to complete the tasks in some directions. At the same time, while carrying out ICO, we have identified several important criteria to pick the right contractor.

For instance, I would highly recommend ignoring banal proposals to take care about your ICO. If the company pretending to promote my project is unfamiliar with it, there is no way for it to be an expert.

It is nearly perfect if the contractor refers to the project that has already been launched. In this case you can

• claim that you are familiar with this project or know CEO in person and have never heard about this company. Watch the reaction of the potential contractor. It will tell you a lot.
• contact with the founder and CEO of the project mentioned by the contractor. Usually, if ICO was successful, CEO would glad to share their experience and provide an insight to reach the success. Moreover, many CEO may share not only information, but also business contacts
• request the information regarding the number of projects led by the agency

There is no way to ignore the last hint. For example, if the small building brigade is working on ten houses simultaneously, the result will be either deadlines extended or low quality of services provided.

As the agency leads 2–3 projects and is completely focused on them, the positive outcome is possible. However, the success of several projects mixed with greed can turn the heads. Those companies form a large order book and become unable to comply with the quality standards. In other words, fashion boutique transforms in cheap supermarket.

To sum up, I would like to give CEOs two key advises:

• never prepay. Big companies do not need it, others you’d better to ignore.
• the promise to attract crypto funds and big investors is almost for sure just bluffing. There is no way for all the money to flow to your pocket right after the contract with the agency was signed. You will have to find money and investors by yourself.

All the claims mentioned are, of course, not a guide to action, but may help for dialog with potential contractors and assess their competencies.