LIST: How to evaluate ICO opportunities

[wordspavovv]

Hi all,

I'm working this list of factors to consider when evaluating an ICO for investment. This is a LIVING LIST, and I'm seeking input so that I can create a public checklist of sorts. Share your thoughts!

I'll constantly update the questions on this list based on new information. Ultimately, we should be able to evaluate an ICO opportunity by working through the checklist. See the end of the list for sources...there will be many in addition to the feedback I get here.

One list to rule them all!!!

SO, first step was getting the sections down. Now, I am reviewing ICO evaluation articles and adding relevant questions to the sections below:

Evaluating ICO Opportunities

1. Token Purpose: what need does the token address?

• Does the token have a clear purpose?
• How broad or narrowly defined are the use cases for this blockchain?
• Does the token provide return to token holders?
• Who will support the token?
• Is the token structured with centralized control or a decentralized governance?
• Is the token a utility token (usage token or work token) a security token, or a combination?
• For usage tokens: is the digital service being offered useful and does the network underlying the digital service aggregate resources (hashing power, file storage, etc.) that will differentiate the service in the long-term?
• For work tokens: is there a strong network emerging that wants to contribute and is the UX well thought through? And is the service offered useful to people?
• For security tokens: is there some technology underlying the security that gives the token a long-term competitive advantage?

2. Competitive Analysis (SWOT): is this unique in some way?

• What are the possibilities past the first use case?
• Is there a core technical or product advantage that is likely to lead to competitive differentiation?

3a. Technology: what is the tech?

• What type of technology is it? (DApp? Infrastructure? Currency?)
• What blockchain is it running on?
• Are they developing their own infrastructure instead? If so, why?

3b. (Functioning) Prototype: how strong is the prototype?

• Is there a working prototype code working on a testnet?
• Do they have prototype code at all (even if its not currently executed)?
• Does the code have commentary?
• Does the commentary explain clearly the purpose of the function?
• Are the functions a reasonable length? i.e. are they less than 50 lines?

4. Minimum Viable Product: how solid is the product?

• Is there a working prototype?
• Is the product's technical specification thorough and does it demonstrate mastery of the subject matter?
• Are there people out there who want and need this product right now?
• Does the product benefit from network effects?

5. Team: who's running the show?

• Can the team be found on LinkedIn and Github?
  
• Is the team exceptional technically, inclusive, transparent, objective and capable of fostering a vibrant global community?
• Can this team attract partners and participants?
• Are there people on the team who understand marketing and evangelizing?
• Does the team have a history of success, demonstrated ability to overcome obstacles to success and strong desire beyond money?
• Has the founding team demonstrated the characteristics (inclusive, transparent, objective, etc.) necessary to build a healthy community?
• What is the founding team's expertise with cryptocurrencies and blockchain? Are there any red flags concerning their credibility in these areas?

6. Advisors: who are the big guns? (mentors and advisors)

7. Roadmap: where do they plan to go?

• What is the roadmap for bringing their project to market?
• Are the goals achievable based on what the team has accomplished to date?

8. Hype: what are people saying about the ICO? (ratings + community + PR)

• Does the project have an announcement (ANN) thread on BitcoinTalk?
• Is there a Reddit community?
• Is there an official presence on Slack, Rocketchat, Gitter, Telegram?
• Are there a significant number of users on the main social media pages for the project? (Bitcointalk, Telegram, Twitter, Medium, and YouTube)
• How often has the project been mentioned in the press?
• Has the project been mentioned in mainstream technology media and in prominent finance publications? (Techcrunch, VentureBeat, Forbes, WSJ, Reuters, etc.)

9. Token Offering Structure: can I make money?

• What is the hard cap?
• What is the soft cap?
• How many tokens are being created?
• What is price per token?
• Will the software platform generate new tokens?
• How will tokens be used after the ICO? (e.g., marketing, legal, development, etc.)
• When will you have access to your tokens?

Thanks in advance for your input!

Crypto-Kristen  

SOURCES:
1. "Our Process for Evaluating New Tokens" by Nick Tomaino https://thecontrol.co/our-process-for-evaluating-new-tokens-4627ed97f500
2.  "Scrap the White Paper: How to Evaluate Tokens and Blockchains" by Coindesk https://www.coindesk.com/scrap-white-paper-evaluate-tokens-blockchains/
3. "How to Evaluate an Initial Coin Offering" by Strategic Coin http://strategiccoin.com/evaluate-initial-coin-offering/
4. "Due Diligence: How to Evaluate an ICO" by Cryptos R Us https://cryptosrus.com/due-diligence-how-to-evaluate-an-ico-initial-coin-offering/
5. "Due Diligence: How to Evaluate an ICO Investment" by Bitcoin Market Journal https://www.bitcoinmarketjournal.com/ico-due-diligence/
6. "10 Steps for Evaluating Digital Asset Crowdsales" by  Token Market https://tokenmarket.net/blog/how-to-invest-to-ico-and-blockchain-tokens/
7. "10 keys for evaluating Initial Coin Offering (ICO) investments" by CryptoPotato https://cryptopotato.com/10-keys-evaluating-initial-coin-offering-ico-investments/
8. "Methodology" by ICORating https://icorating.com/methodology/

Thank you so much for doing these list, I hope now newbies stop talking shit about "ICO scams", I got tired listen to them

[Kristen_Colwell]

Are these two sections actually the same thing??? Should I combine them into one section "Minimum Viable Product"?

3b. (Functioning) Prototype: how strong is the prototype?
Is there a working prototype code working on a testnet?
Do they have prototype code at all (even if its not currently executed)?
Does the code have commentary?
Does the commentary explain clearly the purpose of the function?
Are the functions a reasonable length? i.e. are they less than 50 lines?

4. Minimum Viable Product: how solid is the product?
Is there a working prototype?
Is the product's technical specification thorough and does it demonstrate mastery of the subject matter?
Are there people out there who want and need this product right now?
Does the product benefit from network effects?

[Kristen_Colwell]

Do not post spam or announcements here.

Only looking for comments related to THE LIST.

Thanks!

Crypto-Kristen

[#CapsLOck]

This updates is really a big help to all and were very lucky that you actually share some sources where we can actually find immediatlely in terms of evaluating the ICO.

[Kristen_Colwell]

This updates is really a big help to all and were very lucky that you actually share some sources where we can actually find immediatlely in terms of evaluating the ICO.

Thank you! Chime in if you see something to be added/updated/deleted.

Best,

Crypto-Kristen 

[Kristen_Colwell]

Legality is obviously an important consideration, but how easy/difficult it is for potential investors to figure the details out? It seems like regulations are changing every day across the globe.

Any thoughts on the legality questions we would add to THE LIST?

Check out the "Legality" section in this blog post: https://blog.ethfinex.com/analysing-icos-4abe41930f04 I think it's well done, but don't have concrete questions to add to THE LIST.

 
Crypto-Kristen

[Kristen_Colwell]

Just found this gem:

"Cryptoassets: A crowd sourced evaluation & due diligence framework"
By Alexander Lange
https://medium.com/birds-view/cryptoassets-a-crowd-sourced-evaluation-due-diligence-framework-98b921c82731

I'm digging through this now and will add questions to THE LIST of course.

Enjoy,

Crypto-Kristen 

[Kristen_Colwell]

SEEKING INPUT 

May I have your input on the order of the sections, the titles of the sections, and the brief description next to each section title.

Here are the current sections:

1. Token Purpose: what need does the token address?

2. Competitive Analysis (SWOT): is this unique in some way?

3a. Technology: what is the tech?

3b. (Functioning) Prototype: how strong is the prototype?

4. Minimum Viable Product: how solid is the product?

5. Team: who's running the show?

6. Advisors: who are the big guns? (mentors and advisors)

7. Roadmap: where do they plan to go?

8. Hype: what are people saying about the ICO? (ratings + community + PR)

9. Token Offering Structure: can I make money?


Thank you!

Crypto-Kristen 

[Kristen_Colwell]

Hi all,

I'm working this list of factors to consider when evaluating an ICO for investment. This is a LIVING LIST, and I'm seeking input so that I can create a public checklist of sorts. Share your thoughts!

I'll constantly update the questions on this list based on new information. Ultimately, we should be able to evaluate an ICO opportunity by working through the checklist. See the end of the list for sources...there will be many in addition to the feedback I get here.

One list to rule them all!!!

SO, first step was getting the sections down. Now, I am reviewing ICO evaluation articles and adding relevant questions to the sections below:

Evaluating ICO Opportunities

1. Token Purpose: what need does the token address?

• Does the token have a clear purpose?
• How broad or narrowly defined are the use cases for this blockchain?
• Does the token provide return to token holders?
• Does the token align incentives to simultaneously accelerate growth and token value?
• Who will support the token?
• Is the token structured with centralized control or a decentralized governance?
• Is the token a utility token (usage token or work token) a security token, or a combination?
• For usage tokens: is the digital service being offered useful and does the network underlying the digital service aggregate resources (hashing power, file storage, etc.) that will differentiate the service in the long-term?
• For work tokens: is there a strong network emerging that wants to contribute and is the UX well thought through? And is the service offered useful to people?
• For security tokens: is there some technology underlying the security that gives the token a long-term competitive advantage?

2. Competitive Analysis (SWOT): is this unique in some way?

• Does the project benefit from being on the blockchain? Should it be on the blockchain?
• Can the company successfully dethrone any blockchain-based competitors in their industry?
• What are the possibilities past the first use case?
• Is there a core technical or product advantage that is likely to lead to competitive differentiation?
• Does the company have strategic partnerships with trustworthy sources within the industry?

3a. Technology: what is the tech?

• What type of technology is it? (DApp? Infrastructure? Currency?)
• What blockchain is it running on?
• Are they developing their own infrastructure instead? If so, why?
• Is the token mineable?

3b. (Functioning) Prototype: how strong is the prototype?

• Is there a working prototype code working on a testnet?
• Do they have prototype code at all (even if its not currently executed)?
• Is the code a copycat that implemented no new features?
• Does the code have commentary?
• Does the commentary explain clearly the purpose of the function?
• Are the functions a reasonable length? i.e. are they less than 50 lines?
• Does the code allow for rapid expansion of user base and network interactions?
• Are there any external audits of the code?

4. Minimum Viable Product: how solid is the product?

• Is there a working prototype?
• Is the product's technical specification thorough and does it demonstrate mastery of the subject matter?
• Are there people out there who want and need this product right now?
• Does the product benefit from network effects?

5. Team: who's running the show?

• Who is the founder, what is his/her background? (Have they built and sold a company before, or a new entrepreneur?)
• Can the team be found on LinkedIn and Github?
• Is the team exceptional technically, inclusive, transparent, objective and capable of fostering a vibrant global community?
• Can this team attract partners and participants?
• Are there people on the team who understand marketing and evangelizing?
• Does the team have a history of success, demonstrated ability to overcome obstacles to success and strong desire beyond money?
• Has the founding team demonstrated the characteristics (inclusive, transparent, objective, etc.) necessary to build a healthy community?
• What is the founding team's expertise with cryptocurrencies and blockchain? Are there any red flags concerning their credibility in these areas?
• Is the team able to explain, in relatively simple terms, the value derived from using the blockchain?
• How many developers are on the team?
• Do the team's developers have active GitHub profiles?

6. Advisors: who are the big guns? (mentors and advisors)

• Are there any industry experts backing the project financially or as advisors?
• What tangible benefit (i.e. advice or strategic connections) do advisors provide the company?
• Do advisors include the project on their own public profiles such as LinkedIn?
• Have advisors discussed the project publicly and recently?
• How involved are the advisors in the project's online community?

7. Roadmap: where do they plan to go?

• What is the roadmap for bringing their project to market?
• Are the goals achievable based on what the team has accomplished to date?

8. Hype: what are people saying about the ICO? (ratings + community + PR)

• Is there a well-developed whitepaper?
• Is there a professional website?
• Does the project have an announcement (ANN) thread on BitcoinTalk?
• Is there a Reddit community?
• Is there an official presence on Slack, Rocketchat, Gitter, Telegram?
• Does the company report progress on a regular basis?
• Are there a significant number of users on the main social media pages for the project? (Bitcointalk, Telegram, Twitter, Medium, and YouTube)
• Is the social community diverse?
• How is customer service and tech support on the project's social media accounts?
• Is there a bounty program?
• Is there an airdrop?
• How often has the project been mentioned in the press?
• Has the project been mentioned in mainstream technology media and in prominent finance publications? (Techcrunch, VentureBeat, Forbes, WSJ, Reuters, etc.)

9. Token Offering Structure: can I make money?

• What is the hard cap?
• What is the soft cap?
• How many tokens are being created?
• What is price per token?
• Is there a pre-sale?
• Will the software platform generate new tokens?
• What is the planned use of funds? (e.g., marketing, legal, development, etc.)
• What share of the token distribution is allocated to bounty program?
• How are tokens put into the hands of investors and interested individuals?
• Are the founders holding onto most tokens?
• How long is the vesting period before investors can diversify?
• Are the funds in a multi-signature wallet?
• How do you buy tokens? Is there Escrow or direct to a company wallet?
• Is the team going to destroy or redistribute a significant part of unsold tokens?
• Is the token distribution coming directly from a smart contract?
• Is there a cap on funds raised per person?
• What rights does the token provide the investor?
• Are there any limitations on the ability to resell the coin or token?
• Is there a lock-out period? If so, for whom?

10. Legal Considerations: is this on the up-and-up?

• Do either national or international regulations apply to the project?
• Is the ICO compliant in your country?
• If a security token: federal and state securities laws require investment professionals and their firms who offer, transact in, or advise on investments to be licensed or registered. Is this the case?
• Is there a SAFT agreement?

Thanks in advance for your input!

Crypto-Kristen  

SOURCES:
1. "Our Process for Evaluating New Tokens" by Nick Tomaino https://thecontrol.co/our-process-for-evaluating-new-tokens-4627ed97f500
2.  "Scrap the White Paper: How to Evaluate Tokens and Blockchains" by Coindesk https://www.coindesk.com/scrap-white-paper-evaluate-tokens-blockchains/
3. "How to Evaluate an Initial Coin Offering" by Strategic Coin http://strategiccoin.com/evaluate-initial-coin-offering/
4. "Due Diligence: How to Evaluate an ICO" by Cryptos R Us https://cryptosrus.com/due-diligence-how-to-evaluate-an-ico-initial-coin-offering/
5. "Due Diligence: How to Evaluate an ICO Investment" by Bitcoin Market Journal https://www.bitcoinmarketjournal.com/ico-due-diligence/
6. "10 Steps for Evaluating Digital Asset Crowdsales" by  Token Market https://tokenmarket.net/blog/how-to-invest-to-ico-and-blockchain-tokens/
7. "10 keys for evaluating Initial Coin Offering (ICO) investments" by CryptoPotato https://cryptopotato.com/10-keys-evaluating-initial-coin-offering-ico-investments/
8. "Methodology" by ICORating https://icorating.com/methodology/
9. "ICO Analysis Framework" by Kasper Rasmussen https://blog.ethfinex.com/analysing-icos-4abe41930f04
10."Evaluating Tokens and ICO" by HackerNoon https://hackernoon.com/evaluating-tokens-and-icos-e6c22c1885bb
11. "ICO Analysis Framework" by MT Kander http://www.mtkander.com/cryptocurrencies/ico-analysis-framework/
12. "How to Value Cryptocurrency" by HackerNoon https://hackernoon.com/the-7-things-you-need-to-know-from-the-valuing-cryptocurrency-conference-call-c238095a03b9
13. "White Papers Versus Other ICO Evaluations" by Financial Advisor Magazine https://www.fa-mag.com/news/white-papers-versus-other-ico-evaluations-36272.html
14. "How to evaluate a Blockchain ICO" Nami Consulting http://consultnami.com/how-to-evaluate-a-blockchain-ico/
15. "How to Evaluate an ICO (a VC Perspective)" by Lauren Stephanian https://medium.com/the-mission/how-to-evaluate-an-ico-a-vc-perspective-65ac781971b6
16. "Investor Bulletin: Initial Coin Offerings" by United Securities & Exchange Commission https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-bulletin-initial-coin-offerings
17. "How to Evaluate an ICO" by Shermin Voshmgir https://medium.com/blockchain-hub/how-to-evaluate-a-ico-part-1-c6829d4de766
18. "ICO Bounty Programs: Your community should be more than Bounty Hunters" by Brian D Colwell https://briandcolwell.com/2017/12/ico-bounty-programs-your-community-should-be-more-than-bounty-hunters/.html

Heading to bed for the night! The current list is above. Please check out my last few entries to see some specific questions I have in developing THE LIST.

...And never forget the purpose...

To build...

One list to rule them all!!!!

[Kristen_Colwell]

Per a suggestion from one of my crypto-friends on Telegram, I am adding links to some of the abbreviations on the list (DApp, SAFT, etc.).

May I have input on:
1. Which terms on the list warrant a hyperlink to additional detail?
2. What are the best sources to use as references?

Thanks all!

Crypto-Kristen 

[Kristen_Colwell]

 

HELP! The list is light on Roadmap related questions.

How do you analyze Roadmaps? What details do you look for?


Thanks for your input!

Crypto-Kristen 

[Kristen_Colwell]

HELP!
THE LIST is light on questions re: the Roadmap. Any suggestions?


Thank you,

Crypto-Kristen 

[SalmanMJ9]

Thanks for the list, nowadays we see loads of ICOs and obviously it's important to differentiate the good/bad ones! I'd use your list for my next research! Thanks

[btcjoin14]

Do not post spam or announcements here.

Only looking for comments related to THE LIST.

Thanks!

Crypto-Kristen

Thanks for the list.
Have you ever thought about making a video to put all this information on? It would be pretty helpful.

[Kristen_Colwell]

Do not post spam or announcements here.

Only looking for comments related to THE LIST.

Thanks!

Crypto-Kristen

Thanks for the list.
Have you ever thought about making a video to put all this information on? It would be pretty helpful.

Great idea. Yes, I'm planning to support this list with blog posts and <maybe> a video or two.

Appreciate your feedback! 

Best,

Crypto-Kristen

[Kristen_Colwell]

Thanks for the list, nowadays we see loads of ICOs and obviously it's important to differentiate the good/bad ones! I'd use your list for my next research! Thanks

Glad to be of assistance. Don't forget to send any suggested edits or additions! I'm sure we'll find questions to add once we all start using this list.

Best,

Crypto-K 

[johnleo]

I want to add about point 5 (team)
It is good team if they participated in many blockchain event or seminar. It is a prove that they are serious team to run ICO and without intention to scam people.

[max6575]

different token might have with same or similar service as developer to works on manage with customs of details with strategy as lying with the whitepaper for investors to sees as decision to put of parts with investment unit with the projects.

[LeroyBro]

That's a nice list, well done.

Just wish more people would actually read it now and do proper research before investing in every other shitty ICO and then make a thread complaining about it.

[MichaelMeu]

I only invest in real companies, look at watertech

https://www.watertech.io/

Dividend Paying Token, Real ICO startup companies with working products around the globe!

This is an ICO to invest in, not like other "dream ICO's"

Put your shilling elsewhere. Please nobody reply to this thread with shilling, only comments about the list and increasing its quality are wanted.