6 Factors To Investigate For Lucrative ICO Investment

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FinanceX

5 min readNov 1, 2018

"Scam", "fraud", and "fake" are keywords often associated with ICOs in 2018. These words can jump off a page in a way that others cannot. Demonstrated examples of ICO investors deceived out of huge amounts of money have put a sour taste in the crypto communities mouths and discouraged them from future investment opportunities.

However, this form of investment is still very attractive, but now investors have a better idea of what the signals are when identifying a scam. ICO investment can be extremely lucrative if you find the right one, so you need to know what to look for. This article will help you do just that.

The project purpose and product

A business project in any industry, no matter the location, advertising or even whether it’s good or not, needs to solve a problem for the community. Too often we see businesses with a solution in desperate search of a problem when the the opposite is required. Can you visualize the product helping people in a way that current solutions just can’t achieve?

Competitors in the industry are also a huge factor to consider. What competition exists? Have any businesses tried and failed? Knowing this, you get a more in-depth look at the investment ICO and whether it’s likely to increase in value when listed.

Members are behind the project

On TV shows such as Dragon’s Den and Shark Tank it’s not so rare that the “dragon’s” and “sharks” don’t quite believe enough in the product, but invest anyway because of their perception of the pitching entrepreneur. Although perhaps you shouldn’t do this without their level of experience, it shows the importance of competent people and a competent team.

FinanceX team hosting an event in Indonesia

Ask yourself these questions when trying to learn about the team:

What fields of expertise does the team possess?
Who have they worked for and what positions did they occupy?
Is it difficult to find information or are they transparent?
Have they attended events and social gatherings?

In late 2018, transparency is everything. Appearing publicly is critically important to establish trust with the community. If the team presents clear information, relevant expertise, and a real-life social presence, perhaps you can put a tick in that box.

Listen to the ICO media channels

Even scam ICOs usually produce a good social media following. Facebook, Twitter, Telegram, Bitcointalk, YouTube, and LinkedIn are extremely important to build and inform a community. Vibrant, enthusiastic followers can end up doing most of the marketing for a company as they feel engaged and excited about the possibilities.

It’s crucial to do your own evaluation of the community. Are the comments and reviews mostly positive besides the obvious bounty hunter influence? How does the company answer the more negative questions? Ask a host of tough questions yourself and weigh up the quality of the answers.

Technology

All ICOs, whatever the industry, are based on blockchain, the technology of the future. As you probably know, blockchain technology allows products and services to run faster and more smoothly, with a greater level of trust and less errors. Explaining blockchain in the most simple of ways is easy enough for most to understand, but the details are significantly more complicated and demand a high level of proficiency.

Without the existence of at least a demo product or any previous products, it’s difficult to gauge the technological capabilities of a team. Let’s add some more questions to the growing list:

Have the company produced technology products before?
Are they planning to develop the product in-house or out-source?
Is there already technology that exists for the same purpose and are the proposed improvements that much better?

Check MVP (if applicable)

Projects raising capital using the ICO route always only painted on paper lacking a finished product or a product with only minimal functionality (MVP) for investors to try out. It’s always safer to invest in an ICO with a fully functioning product rather than an idea on a Whitepaper, but these are difficult to find. Due to trust issues with a number of ICOs, this should become more normal.

FinanceX trading platform launched before the upcoming ICO

MVPs are the next best thing to look out for and test for yourself because it’s the most similar version to the product that you are investing in. Perhaps with 2019 just around the corner, an idea is just not enough of a reason to invest.
FinanceX, a new fiat-to-coin trading platform in Vietnam launched the product before ICO with another exchange launching in Indonesia before the completion of ICO Round 1. FinanceX will launch six more high quality exchanges in Southeast Asian countries before 2020. These steps helped develop a large user base, community, creating trust for ICO investors.

Price of token, allocation of money after ICO

If the other boxes have been ticked, we need to understand how the company is planning to use the capital raised and the potential value of the token post-ICO. Is this a pump-and-dump situation, or should I hold this token long-term based on smart allocation of funds aiding future development? It’s vital to look at what percentage of tokens the founders are keeping for themselves. Does 50–80% seem greedy to you? Might be a sign you need to steer well clear.

We all know the price of tokens goes up as we move to the later rounds of the ICO. If you are on-the-fence about investing, ask yourself. Have I come across this project a little late? Maybe it would have been worth it one month ago when the token prices were half what they are now.

Notable mentions…

Best not to stop there! Also check out the advisory team, total token numbers, legality, roadmap ... Each project will have its own unique factors that investors need to investigate.

Wishing you all the best in finding a groundbreaking ICO that, after your due diligence, is the right one for you.

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Don’t forget to grab FNX tokens before the Presale ends!

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