Initial Coin Offerings are creating new set of millionaires globally. There is an increase in the value of capital generated through ICOs. For the benefits of those who are new to ICOs; this is just a means through which start-ups generate capital. More like investing into the shares of a company, investors receive tokens or future cryptocurrency in exchange for their investment.
ICOs have dwarfed equity funding since the Q2 of 2017. During the Q3 of 2017, ICOs raised $1.3 Billion and still counting. Yet, it is unregulated with several legal grey areas. There is a mad rush by investors enticed by the 1,320% average returns on ICOs.
However, questions still remain unsolved on knowing the right ICO to invest in. Consider the following factors in making the perfect choice of ICO.
Team Composition and Credibility
This should be your initial reaction to any ICO. Knowing those who makes up the development team and advisory board will say a lot about the ICO. Look out for popular names and assess their credibility. Check out their LinkedIn profiles and look through their connections. Evaluate the relationship of the development team with other ICOs in terms of impact and experience.
Don’t be a lazy investor. Average investors are not concerned with what the whitepaper says. To be on the safer side, take time out to read the whitepaper. Go a step further, write out your questions and concerns about the ICO. After reading, a little bit of research to solve your own questions is pertinent. For those questions you are unable to answer on your own, check the next factor to solve them.
Popular among crypto enthusiasts and investors, BitcoinTalk.org is reputed to be the largest forum for Cryptocurrency related issues. Here is where you can engage the ICO team and advisory board. Bitcointalk has a ranking system, which you should pay attention to. Ensure you are not engaging with low ranking writers or newbie. Never overlook reputation in your choice of ICO. Ask questions on the thread and be sure you can get satisfactory answers. If the answers are not satisfactory, move on to this next step.
Media and Communication
Media hypes can contribute hugely to the success of an ICO, this denotes media attention and recognition. Mainstream media will not associate with an ICO considered a scam or a liability. Look out for what the media is saying about the ICO, read in between the lines. Aside the mainstream media, carry out a simple search on social media especially Twitter. This should help you in making an accurate judgement.
Token and Mode of Distribution
Know the actual value of tokens to be sold as ICO and weigh the value to be transferred to the team. Any value above 50% of the entire ICO should ring a cautionary bell, this means greed on the part of the team. Regardless of the expected success of the ICO, greed will lead to the failure of the entire ICO. You should avoid being part of such venture.