Lets talk about proper due diligence for ICO's This industry deserves better!

[hobbskevin]

Investors should tread carefully when considering investing in a blockchain startup’s initial coin offering.

Failure to conduct thorough due diligence before buying into a blockchain startup is the biggest mistake coin buyers make. Though investigating of an ICO can be time consuming because of a lack of transparency, it’s less painful than watching a scam coin’s value fade away in the aftermarket.

While most of the development teams who are creating new coins, developing software and promoting offerings are honest and well intentioned, the promise of easy money in blockchain crowdsales has attracted hucksters and con artists.

Based on our experience advising coin projects, initial offerings can be divided into one of three categories:

Legitimate, but misguided and inexperienced.
Illegitimate and deliberately misleading.
And, legitimately well planned and executed.
The legitimate, but misguided offering, involves well-intentioned software developers whose technological value proposition doesn’t stand up to rigorous scrutiny. While some amateur offerings have raised money, demand for their coins usually fizzles from a lack of support. Their core technological innovation doesn’t usually pan out.

Ask the Right Questions

Avoiding the first two categories takes the patience of a veteran police detective. Overcoming the industry’s lack of transparency means asking probing questions about a group’s leadership, their industry track record and how the project solves a real-world problem.

An illegitimate offering will usually contain key red flags to look out for:

Is the offering supported by a vague value proposition?
Is there a lack of information on the team and board of advisors?
Is there a lack of a formal business plan with set milestones and an explanation of a clear strategy?
Does the project extend promises of significant returns? Is there a lack of transparency and communication?
At Vanbex we use an in-depth survey to initially assess prospective development teams to help both developers and potential investors. The survey forms the foundation of what we call an Initial Coin Offering Memorandum, a public document that establishes a new standard of transparency in crowdsale communications. It lays out the scope of the project and fills any gaps in the development team’s technical white paper.

Most projects with multiple red flags will never even launch, and if they do, it is likely demand for the coins will wane and no one will be able to identify how the money from the initial offering was deployed.

The coin investor is left holding an empty bag.

The Future of ICOs

When purchasing coins in an ICO, investors are essentially buying into the potential value of the project, or are purchasing future access to the technology at a reduced rate. With a finite number of tokens available in an ICO, each token carries a percentage of the overall value of the project.

The future of initial coin offerings will hinge on how effectively development teams can address investor skepticism about the viability of their technology and management’s ability to deliver value to the market place. While blockchain likely has a bright future, the pace of development will depend on the ability of development teams to win and retain the trust of potential investors.

[bathrobehero]

You can't do proper research due to anonimity and lack of transparency and you have no guarantees so as far as I see it, there are no investors to speak of, only gamblers.

Yes, you can make a profit from an ICO just as you could win with a slot machine if you're lucky, but that doesn't make it a smart decision to put money into them.

There's nothing wrong with gambling though as long as people are honest about it, and there's a lot of overlap between the definition of the two terms but I'd assume investing implies an educated decision based on research which is usually just not possible.

[hobbskevin]

You can't do proper research due to anonimity and lack of transparency and you have no guarantees so as far as I see it, there are no investors to speak of, only gamblers.

Yes, you can make a profit from an ICO just as you could win with a slot machine if you're lucky, but that doesn't make it a smart decision to put money into them.

There's nothing wrong with gambling though as long as people are honest about it, and there's a lot of overlap between the definition of the two terms but I'd assume investing implies an educated decision based on research which is usually just not possible.

We actually vet our clients and make them prove things like Incorporation, identity, address, technology, development, and much more. I'm hoping this can be a discussion to talk about the things we should be looking for so that investors can be confident

[Spoetnik]

It is NOT possible to use due diligence in a corrupt lawless scene.
This is a sad stupid little cliche in crypto..

The big players simply change the game at their will to ensure they always win
..and always get your money.

Case in point.. Ripple the scam coin that started all the ICO bullshit.
Ripple guys not that long ago simply printed more money.. for the hell of it (Because they felt like it)
No one ever did get an explanation as to WHY they unloaded 333 million more coins secretly.

This idea is complete bullshit.
History has shown us the dev's will employ an army of tactics to ensure they are the big winner.
So you are all playing a seriously rigged scammy little game.

What are you going to do chant Identification / user verified ?
Tell ya what..
You all give me a million dollars for an ICO and i guarantee i will say fuck you and walk off with it.
Why wouldn't i ?
It's easy free money and i can get away with it since there is no corresponding IPO financial laws like in Traditional Stock markets like the New York Stock Exchange.

If you invest in ICO's ..then you are an idiot.
It's the equivalent to saying some Pyramid schemes are legit you jsut need to pick the right one.
Wrong !
They are all scammy BY DESIGN !

I find it funny sleazy greedy idiots have tried to legitimize Bitcointalk shenanigans by implying it's legit to morph this forum into Kickstarter for failed currency schemes.

It's no different then going to Kickstarter and seeing 6,000 ANN topic listings all saying we are going to make a replacement for FIAT.

..so buy NOW !

ohhhh but wait !

Check this out

https://www.kickstarter.com/rules/prohibited

Prohibited Items

We prohibit projects that are illegal, heavily regulated, or potentially dangerous for backers, as well as rewards that the creator did not make.

    Any item claiming to cure, treat, or prevent an illness or condition (whether via a device, app, book, nutritional supplement, or other means).
    Contests, coupons, gambling, and raffles.
    Energy food and drinks.
    Offensive material (e.g., hate speech, encouraging violence against others, etc).
    Offering a genetically modified organism as a reward.
    Offering alcohol as a reward.
   Offering financial, money-processing, or credit services; financial intermediaries or cash-equivalent instruments; travel services (e.g., vacation packages); phone services (e.g., prepaid phone services, 900 numbers); and business marketing services.
    Political fundraising.
    Pornographic material.
    Projects that share things that already exist, or repackage a previously-created product, without adding anything new or aiming to iterate on the idea in any way.
    Resale. All rewards must have been produced or designed by the project or one of its creators — no reselling things from elsewhere.
    Drugs, nicotine, tobacco, vaporizers and related paraphernalia.
    Weapons, replicas of weapons, and weapon accessories.

If your project involves something illegal, heavily regulated, or potentially dangerous for backers and it is not on this list, please contact us before starting your project.

..ahh now i see why they are posted here and not over there 

[audaciousbeing]

You can't do proper research due to anonimity and lack of transparency and you have no guarantees so as far as I see it, there are no investors to speak of, only gamblers.

Yes, you can make a profit from an ICO just as you could win with a slot machine if you're lucky, but that doesn't make it a smart decision to put money into them.

There's nothing wrong with gambling though as long as people are honest about it, and there's a lot of overlap between the definition of the two terms but I'd assume investing implies an educated decision based on research which is usually just not possible.

I agree with you that one of the factors limiting proper vetting is actually the factor that makes it more worthwhile and that is the anonymity. But the issue of vetting, quite a number of people dont have the required or technical know how on the vetting process or lazy about it. I think the way out is to always be attentive to the signals because something will definitely raise a red flag and anyone who tries to prove that should not be shut down but be looked into intuitive to verify if its actually true or not.

[hobbskevin]

It is NOT possible to use due diligence in a corrupt lawless scene.
This is a sad stupid little cliche in crypto..

The big players simply change the game at their will to ensure they always win
..and always get your money.

Case in point.. Ripple the scam coin that started all the ICO bullshit.
Ripple guys not that long ago simply printed more money.. for the hell of it (Because they felt like it)
No one ever did get an explanation as to WHY they unloaded 333 million more coins secretly.

This idea is complete bullshit.
History has shown us the dev's will employ an army of tactics to ensure they are the big winner.
So you are all playing a seriously rigged scammy little game.

What are you going to do chant Identification / user verified ?
Tell ya what..
You all give me a million dollars for an ICO and i guarantee i will say fuck you and walk off with it.
Why wouldn't i ?
It's easy free money and i can get away with it since there is no corresponding IPO financial laws like in Traditional Stock markets like the New York Stock Exchange.

If you invest in ICO's ..then you are an idiot.
It's the equivalent to saying some Pyramid schemes are legit you jsut need to pick the right one.
Wrong !
They are all scammy BY DESIGN !

I find it funny sleazy greedy idiots have tried to legitimize Bitcointalk shenanigans by implying it's legit to morph this forum into Kickstarter for failed currency schemes.

It's no different then going to Kickstarter and seeing 6,000 ANN topic listings all saying we are going to make a replacement for FIAT.

..so buy NOW !

ohhhh but wait !

Check this out

https://www.kickstarter.com/rules/prohibited

Prohibited Items

We prohibit projects that are illegal, heavily regulated, or potentially dangerous for backers, as well as rewards that the creator did not make.

    Any item claiming to cure, treat, or prevent an illness or condition (whether via a device, app, book, nutritional supplement, or other means).
    Contests, coupons, gambling, and raffles.
    Energy food and drinks.
    Offensive material (e.g., hate speech, encouraging violence against others, etc).
    Offering a genetically modified organism as a reward.
    Offering alcohol as a reward.
   Offering financial, money-processing, or credit services; financial intermediaries or cash-equivalent instruments; travel services (e.g., vacation packages); phone services (e.g., prepaid phone services, 900 numbers); and business marketing services.
    Political fundraising.
    Pornographic material.
    Projects that share things that already exist, or repackage a previously-created product, without adding anything new or aiming to iterate on the idea in any way.
    Resale. All rewards must have been produced or designed by the project or one of its creators — no reselling things from elsewhere.
    Drugs, nicotine, tobacco, vaporizers and related paraphernalia.
    Weapons, replicas of weapons, and weapon accessories.

If your project involves something illegal, heavily regulated, or potentially dangerous for backers and it is not on this list, please contact us before starting your project.

..ahh now i see why they are posted here and not over there 

This industry is growing rapidly and becoming more and more viable as real world applications. It has to start somewhere to make it right and work for those who are looking to invest in good projects and also make a profit. Instead of knocking everything about it lets try to make it work.

[Spoetnik]

Am i being lectured by a Junior member here about Altcoins ? 

NIGGAH PLEASE 

Lets make ICO's work ..innovationshun'z & shit ya'll !

[ICOcountdown.com]

You can check my previous due diligence work if you like.

https://medium.com/@icocountdown/

I tend to just delist projects now because I have to sort through many for http://icocountdown.com


 

[Spoetnik]

uggh 

Mass coin cloners here vetting projects all with swirling identities.. yeah that's "legit"