Tips for Investor: How to Choose Potential ICO
Hello, good day to you all. Today i will tell something especially if you are investor, there is some tips about how to choose potential ICO before investing our money to an ICO.
ICOs are definitely gaining popularity. According to the CoinSchedule portal, during 2017 there were more than 230 ICO . The total amount of funds raised exceeded $ 3.8 billion in 2017, and for just 3 months in 2018 ICO have already received over $5 billion in investment funds!
However, the popularity of ICO does not reduce the risks associated
with the purchasing of tokens. ICO from high quality companies can allow
you to increase your capital and profit. However, investing money in
fraudulent or simply substandard projects can lead to a loss of funds.
Several questions arise when dealing with ICO: How can you distinguish
quality ICO from inferior ones? How can you understand which ICO is
worth investing in, and which ones are not?
Read this: What is ICO?
Tip # 1: Attentively Read the White Paper (especially the marketing plan and roadmap points)
This
is the Holy Bible for any project, a hybrid between a business plan and
an advertising brochure designed for the investor. The more detailed
and clear the information is presented within a white paper, the more
chances the company has for receiving the necessary amount of investment
funds.
A good WP must explain all the essential details of an ICO:
- The existing problem(s) the consumer faces
- The solution(s) to the existing problems in the form of the creation of the project. This should include a thorough explanation on how the product helps to solve the existing problems
- The release of tokens and terms of their access regarding the exchange
- The stages of development
- The terms and methods in regard to the implementation of tasks and goals
- The amount of necessary investments and the planned results in quantitative terms.
When
studying the WP, you need to pay attention to the required amount of
funds, and how this sum relates to the goal. For example, are the
expenditures too high? An additional characteristic of an excellent WP
is a WP that brings a detailed development plan for the project into the
future for 1–2 years. For example, the Ubcoin Market WP describes business and marketing plans for the project all the way to 2022.
An
important point is the thoughtfulness of the marketing strategy, which
should also be spelled out in the WP. Does the project illustrate an
understanding of how it will reach users? For example, Ubank is the
creator of Ubcoin Market, which has planned to implement Ubcoin Market
into the Ubank mobile app. Furthermore, Ubank
has contracts with Samsung and Fly regarding the preloading of the
application onto new phones. Therefore, Ubcoin Market casts a large net
for potential customers for those phones sold in the 10 countries of
Eastern Europe and Central Asia. This indicates serious and long-term developmental plans for Ubcoin, which includes a detailed marketing strategy.
Tip # 2: Look at how well feedback mechanisms are established
Feedback in ICO projects is often carried out through the website, groups in instant messengers and social networks.
For example, in Telegram, Facebook, Twitter, etc. It is necessary to
pay attention to the number of participants in the group, the quality of
the administrators and the topics discussed. If there are few
participants (1–2 thousand) this can mean that the project is not very
interesting for investors.
If
there is a significant number of participants (more than 50 000), but
very little activity where no one writes messages — this can mean a
“wrap-up” of the group. If there are a lot of irrelevant messages that
are not about the project, it can mean that the group is being spammed
and the work of the administrators is substandard (they should delete
spam messages). Also, in a good project, administrators respond quickly,
fully and efficiently to participants’ questions.
Tip # 3: Check if there is a prototype
The
presence of a real working prototype is a huge advantage for any ICO.
Of course, projects at the development stage of the Alpha version or
writing code can also become an object of investment. Nevertheless, the
level of risk for such a project is much higher (maybe the team is not
going to create a product at all, so it did not make a prototype). The
presence of a prototype are what investment funds and governments
typically analyze in order to draft laws for the protection of
investors’ rights.
Tip # 4: Make sure the project team is competent
Among
managers and advisors, the availability of professionals from various
business areas is a huge plus. In fact, this means that the project has
been worked out not only on the part of IT, but also on financial,
marketing and legal aspects.
Well that's some tips that i can share today, hopefully it'll be worthy to you. Thanks for read and keep learning!
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