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With the advent of the smart contract in the blockchain technology, new investors are coming up with their token offering. This has led to the influx of different icos in the digital market, making it a herculean task in figuring out which of the companies have the real interest of investors at heart. Over the years there have been success stories from companies on making massive returns on their ICO offerings, we have the example of Hdac and filecoin who recently made a whopping sum of $ 258 million and $ 275 million respectively. Without a doubt, there are success stories, but this doesn’t negate the fact that joining an ICO fundraising without asking the proper question is a dangerous move.
It is noteworthy that ICO is a high-risk investment. As such it is important not to invest more than you can afford to lose. There is no government regulation in ICO investment, so you might not get back your lost investment. This article will outline, in no particular order, primary keys to look out for when choosing an ico to invest in.
1. Check Out An Ico Listing Sites
An ico listing site will help you conserve your time and energy of surfing the internet for the best possible ico to invest in. They have curated top ico list, upcoming icos and several others that meet the investors need. When checking out an ico listing site look out for the one with a fire tag which indicates the popularity of the ico in the marketplace. It is also an indication that the ico is among the top rated among its contemporaries. It is essential for newbies in the crypto market to check out a listing site, to be on the right track while investing.
2. Review The Icos Whitepaper
After series of the daunting task of finding a suitable ico, you finally found one. But you should try to review their whitepaper. The whitepaper is the essence of a company starting an ico. It will help you as an investor determine if you would like to support their project and you should also consider what benefits does the project holds for you as an investor. The whitepaper will contain the roadmap of the company which encompasses- the project they are doing, who is in charge of this project, how do they plan to execute the project successfully, how well is the ico structured, do they have any futuristic goals, and how do they plan to make those goals a reality. All there questions and many more will give you an insight if the company have the solid game plan.
3. Have An Ico Tracker Handy
A Group of ico investors works closely to provide updated information about icos one could invest in. Each of these investors belongs to different channel and curate information on which of the ico is a better option to invest in. Five criteria must be checked before icos will be recommended on the ico tracker page. They are:
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The icos road map
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Their white paper
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Team members
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Escrow
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The icos condition
4. Get To Know The Team
We can liken investing in an ico to being in a relationship with an individual; it makes no tad bit sense when you don’t make out time to get to know them. When you make out time to see the company you’re investing, it will help your due diligence in ascertaining if you can invest in them. Companies that are startup might not have offered much background information, but you can run a background check on their founders. Their track records in other areas of investment will give you a glimpse of what they have up their sleeves.
The best tool to use for this exercise is the ico list which will give a full break down of the following information:
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companies detailed background information
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their review and analysis
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companies development team
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their roadmap
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your ROI (return of investment)
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white paper and webpage
5. Regular Communication With Investors
One mistake investors make, and that can somehow seem unnoticeable, is not asking proper questions or asking questions at all. Investors should take out time to join the telegram or slack channel of the company. Then pay close attention to how the company responds to investors question. A company that doesn’t communicate with clarity when responding to an investors question is not a haven for investment. They must maintain a proper level of transparency by every means possible. Most of the companies are startups, if they find it difficult to communicate with investors in clear terms at an early stage, then it’s much better to withdraw from such ico.
6. Take A Cue From VC-Investors
The best individuals to learn from when considering investing in a crypto-market are the venture capital investors. They have dedicated their entire life to spend into business with prospects. When they are considering investing in a market, they find out if the company would be able to give them the envisaged ROI (return of investment). They also believe that a startup doesn’t need much capital to thrive, having much money at their disposal will lead to wasteful spending. In fact, some of them get plunged into debt at the early stage of their trade. Understandably you might not be investing as much as a VC-investor would, but it’s still essential to always ask pertinent questions which will shield you from making regrettable financial mistakes. If you feel a company doesn’t meet your standard kindly decline, and check-up ico list for better options.
7. Verify The Stage Of The Project
Most of the projects embarked on by this company only look good on paper; it is not viable in the real world. For example, dentalcoin has a cap of $40 million, but in essence how many people in the dental world use it for dental care? None. There is no point in starting a company without any use for consumers. Nobody in the dental industry will need cryptocurrency in doing their daily activities.
Though, there is no particular rule which states that a project must get to a finished state before it can hold an ico. But for new investors, it is sometimes useful to see a plan transcend from a theoretical stage to a possible stage before investing in it.
Conclusion
A measure of intuitiveness is needed in determining if you want to invest in an ico. Stringent factors have been outlined above, which should guide your decision-making process, but the bulk of work solely depends on you. It's important to remember that investing in an unregulated company in the crypto market is a considerable risk, but it's worth it when you tactfully play your card.