With hundreds of new ICO’s launching weekly, the question on everyone’s mind is: which ICO’s are actually worth investing in? Weeding out the ICO’s with potential from the ones that are duds or scams is a daunting task for even the most seasoned of investors, not to mention those just getting into crypto. When one decision could mean gaining (or losing) thousands of dollars, you want to make sure that you’re making the most informed decision possible.
Because ICOs often operate outside of legal guidelines, it is up to you to take the necessary precautions to protect yourself from the scammers giving ICOs a bad name. While nothing in the ICO space can be predicted with certainty, asking the right questions will certainly improve your chances of investing in good ones and avoiding the bad ones.
- Research the Concept
The first step to researching any ICO is to make sure they have a solid concept. Look for a whitepaper and a roadmap. Does the concept make sense to you? Does it seem like something that will actually be adopted by the target market? Do they have a solid roadmap and goals that seem reasonable for the type of development their platform needs? Projects set up for scams, or that are simply too unorganized to succeed, often have vague, not well-researched information on their industry. If you have reviewed the concept, and feel good about what you’ve discovered, the next step is to look at the team developing it.
- Research the Team
Anyone can make up a story and concept that sounds good, however, a really strong concept will also have a strong team backing it. A good ICO should have an experienced and trustworthy team and board of advisors. If an ICO does not have visibility into their team, or if their team wishes to remain anonymous, that should send out immediate red flags as those planning to scam you will not want to be identified in connection with the ICO.
Take a close look at the ICO team and board of advisors that you do find. Look each one up individually. Can you find all the different team members elsewhere on the internet? Do they have strong backgrounds? Are their backgrounds related to the ICO including skills that would be important for the ICO to succeed? Do any of the board members have a history of running or launching successful companies? How much experience do the individuals have with cryptocurrency and the blockchain?
If you find that team members aren’t who they say they are or have little to no relevant experience, then those are all typically signs that you should pass on that ICO. However, if an ICO has a strong team, as well as strong and reputable backers, these are all good signs that an ICO is more trustworthy.
- Is the ICO Active Across the Internet?
Look at the ICO’s website. Has it been updated recently? Is it well made and managed? Do they have any sort of active blogs or newsletters to keep their investors updated? A well managed ICO usually cares about their investors enough to keep them informed of the ICO’s progress.
However, if an ICO seems like they put up their site a couple months ago, and haven’t looked at it since, or there is no clear way for investors to receive updates, then it’s probably not an ICO you would want to trust your money with. A reliable ICO will typically have an active digital footprint that spans further than their own site and may include: social pages, telegram groups, reddit, and/or cryptocurrency forums like BitcoinTalk.
- What are other publications saying about the ICO, if anything?
Are other people talking about the ICO? Or can you only find information and publications from the ICO itself? Many of the most promising ICO’s are being watched and analyzed by some of the brightest minds in the cryptocurrency world. Take the time to find the articles, forum threads, and other areas where people are discussing your ICO of interest.
While you shouldn’t fully make your decision based off of other’s opinions, as no one can really predict the success or failure of an ICO, by discovering what everyone else is thinking you can get a feel for whether the feelings surrounding the ICO are positive or negative. Sometimes, the feelings of the investor community can impact the overall success of an ICO, since it may discourage other investors from investing with you.
- What does the ICO plan to do with the money they raise?
A good ICO should have a detailed plan demonstrating what they will do with the money they raise, who or what entity will hold the money, and what portion of the money will go towards different aspects such as building the platform and marketing efforts. Many ICO’s freeze portions of the money raised for a period of time to demonstrate to their investors that they are not planning to just run away with your money. If you feel confident that the ICO you’re wanting to invest in has goals and plans for the money raised, and you feel confident about where you’re money is going, then you may have found a good and reliable ICO. If you have questions or feel unsure about what will happen to your money once you’re invested in an ICO, then that is probably a strong sign that the ICO is probably not a very safe investment.
With today’s ICO market, even one bad sign is probably enough to tell you to look for other investment opportunities. In such a competitive market, there’s no shortage of options for investors, and the ICOs worth your time and money will take the time to manage their ICO and prove why it stands out from the rest. Taking the time to thoroughly research an ICO before you invest may save you from making a bad investment.