Today I want to tell you some words about analytical factors. It’s very popular theme right now and i have some several interesting facts about crypto – investments. Learn how to invest in ICO without a high risk and unexpected expenses.
Before we start, I’d like you to read this text till the end and check if all the statements match the project you are looking to invest in. This will guide you step by step and help you to stay on track and avoid tricky situations which can accrue by cooperation with random people and companies.
• Check if the site uses the HTTPS protocol on its ICO site. If not, you can quite lawfully call this service into question, as your personal data can be easily transferred to the third parties. If the team didn’t bother themselves to set the SSL certificate, we can hardly speak about a security and safety of this site.
• Look through the website that you visit. How does it look like? Pay attention to the interface of their site. Remember that sites like these give programmers a task to make the greatest possible impression on the end user trough the look of their home page. Does it look like it was written honestly and not scrupulously? Are all contacts mentioned on the main resource in a whole size?
• Does the company give a possibility to read a leaflet of any kind of information? Are they described in details and give a reader the certain picture what the company is going to do in the near future? I can tell you the leaflets are one of the most important things in attracting foreign investors. Is the leaflet presented in several languages (like English, Spanish, German, French etc). The leaflet has to explain a customer certain aspects of the business, like promotion, plan of economic growth and a defined explanation where will investors’ money go. The potential investor needs more facts about technical implementation and figures of potential income.
• How much money does the team want to collect? The most perspective and ingenious developers publish a leaflet, which contains a precise statistics of the possible outgoings and a resolution where collected money will be invested in. Nowadays some projects demand huge amounts exceptionally, just because of team’s desire to earn more instead of the real figures. Notice that large sum of money can hardly be spent rapidly — financials should mention the crypto they are going to use to keep the money safe, and far away from collapsing or being involved in another financial crisis.
• Keep an eye on the problem which the project wants to solve or the difficulties it overcomes in a daily life. It is important, because a perspective start-up should be realized and exploited for everyday needs. Will people from different countries invent in this too? When investing we should understand that the project must be both ambitious and marketable. It should be neither car on water nor a trivial boring messenger or a social network, especially in the times, when the market offers us so many variants and choices of such products. It would be nice if this device will contain both creativity with revolutionary ideas and a real benefit. The project has to be profitable on the part of consumers demand. Highly recommended to search for projects which constantly upgrade their projects and make the work of crypto better and faster.
• Competitiveness is significant factor on the international market. Analysing the potential investment, look for any potential rivals with the same mission. At the moment there are not so many revolutionary products which can change people lives once and forever. The project should have at least 3-4 competitors. Generally, if this creation does not have any rivals to compete, in most cases the product is simply not required on the market, and, speaking from an economical side won’t be profitable and investment is not expedient.
• The plan of token –system based investment is technological and reliable enough, but the team has to have the accurate graphics where all these tokens will be spent. If the company uses token only as a method to attract investments, it should have a certain plan of how the tokens will be realized and how the investors can benefit and earn. It would be recomended if the project would consider tokens to be an integral part of its work and the team is plans to raise token value in the future. In the near perspective the advanced token system can become a good profit for investor.
• This factor is closely connected with the previous one. Check if developers are going to buy the tokens from a stock exchange after the end of the ICO to artificially overestimate the token rate.
• The rate of the token shouldn’t be overpriced. Do you know such thing as a “psychological growth potential”? In the case with tokens, I mean that it will be much easier for rate to rise from 1 dollar to 10 dollars, than from 10 dollars to 100. And I speak about the same progress coefficient and expansion almost 10 times.
• The next fact affects the topic of fundraising by developers (Hard Cap). It is rather important side as the sum which the team wants to collect determines their ambitions and further suggestions. If the max price is not mentioned, it can be a bad sign for future investors and the project itself. When the company gathers more money than it is estimated to spend, developers & influencers have no reason to improve the project further. A lack of motivation can lead to stagnation and degradation of the product you develop and make the project clumsy on the financial side. Remember the psychological growth potential too and the number of tokens – it shouldn’t be enormous.
• Look for the bonuses for investors on PRE-ICO. Are not they overpriced? Some projects use high – priced bonuses to attract investors and if you have managed to become such investor you can consider yourself to be lucky. On the other side, if PRE-ICO and ICO rates are significantly different, don’t invest. It can be easily explained that investors after getting tokens on sales immediately sell them on stock exchanges and token rate significantly drops. It makes investing in such projects inadvisable.
• How does the team of the project look like? Can you trust this people implicitly? Do they have an experience in realizing successful IT or crypto projects? In the perfect case there should be a balance between advanced programmers and progressive marketers. If there will be only programmers — the project can become unsuccessful and some problems with distribution and attracting investors may appear. If the team has mostly “merchants” it wouldn’t be very nice because development can become a long process and lead to minor program bugs.
• Does the project have any advisors or professional experts? An advice of experienced IT manager/ specialist will always be needed. Check the list of introduced advisors. Who are these people? Do they have any experience in crypto or IT? Do they have any skills in marketing and what products have they already sold? Does the set of advisors have successful projects behind them? Do they have a potential for further growth and what interesting can they offer to customers and developers? Too many questions.
• Does the project has its own prototype? If the team want to attract more investors, they will certainly develop prototype of their product considering all possible bugs and problems. Ultimately, the prototype has to take into account the interests and thinking of a user and investor. If the company has a minimum of viable products — it is the first sign to invest. It is better when the company has already created their successful product and they just want to integrate it with blockchain to expand business and enter new markets in crypto.
• Did the project go through technical and financial audits? Some companies attract independent audit agencies or experts in the field of information safety. It is often made for investors who want to be sure in security of project they invest to. In the third case the team can announce a compensation for those who will find a bug or vulnerability in program code. The results of such researches can be published or written in the leaflet after that.
• Is the program code available for all users and potential investors? It can be a good sign if the team shows transparency and reliability of their product. Is there any statistics of how many investors were attracted and how much money they raised? The greater will be the number of investors — the more likely the tokens will be distributed fairly and evenly, which will make the token rate less unstable after stock exchanges.
• Are venture companies and business angels interested in investing in such products? Is there any information about investments from major venture companies, if so, it means that this ICO-project has its future and people believe in its success.
• If the company has its leaflet and a roadmap, look through this roadmap and learn about future plans concerning the development of the product and the improvement of a financial component. Does the company and team have accurate and definite ambitions? How do they plan to increase the token rate and attract more users & possible investors? When they plan to achieve their first goals and in what terms?
• Continuing the roadmap topic — milestones. Milestone is the term that defines the control point in development of any project. Shift of a milestone leads to a shift of the whole project. Milestones can be useful tools in encouraging and improving the work of staff, especially if the tokens are paid to the team only after finishing missions and tasks set by the roadmap. Those tasks and missions have to be accurate not vague. It would be very useful if the token keepers would have a chance to vote if the stage on the roadmap has been completed or not. The alternative variant offers the company to keep tokens and investments in independent organizations, which will pay developers only after completing set missions. The more roadmap points are there — the less chance that workers will drop the token rate immediately by selling tokens on the stock.
• Media and the news background of the project. What’s the teams activity in social networks; do they have profiles on different ICO — related websites? How do blockchain experts and advisors react to this product? What are the reviews from independent agencies? Is there a real hype round the project? All these factors are important as they denote media popularity and reputation among experts and possible investors.
Thank you for reading and I hope this guide will help you a bit.
P.S. I had published this guide in to my steemit account as well, so here is link :
https://steemit.com/cryptocurrency/@coingiraffe/how-to-invest-in-icoI think this is an amazing writeup you have here, I will take much time to use the various criteria mentioned above to asses some ICOs in the cryptocurrency space to determine their validity. Thanks for this wonderful information.
