The recent hype created around Bitcoins and other cryptocurrency has paved an amazing way for startups to raise capital funds to give life to their dreams with ICO. Initial coin offerings or ICO is an crowdfunding or crowd investing way of raising capital by giving the contributors the proportional amount of tokens, tokens that may give them equity in the company or access to their platform, products or future services based on the type of tokens.
If you want to know more about the Differrence between coins and tokens: the different types of tokens issued in an ICO take a look at my last post for a bit more insight
https://steemit.com/ico/@uberfreelancer/coins-vs-tokens-the-3-different-types-of-tokens-issued-during-an-ico
ICO's are growing in popularity as we write, thousands of dollars are being pledged right now. It's only a matter of time before ICO's become a multi trillion dollar industry. Like any other investments, before putting in our hard earned money we have to foresee and predict the future of the company to estimate or examine the possibility of getting our investment back or better get a bullish R.O.I. Here are the
5 Things You Have To look for In An ICO Before Investing
(I have use QURITO a knowledge sharing platform, an ongoing ICO, to explain the different aspects.)
1) THE DEVELOPMENT TEAM
The mind behind the idea is as important as the idea is, no matter how good the project might be it is worthless if the right set of minds is not working behind it with the passion the project deserves. Check out the team behind the team behind the project, the advisory board backing the idea. Do a little bit of research on their portfolio and track records, find out if they have any experience in the crypto-sphere, and any projects that they were involved in.
2) VALUE PROPOSITION
Every ICO raising funds will have a piece of documentation that explains the project in and out called the WHITEPAPER. Read the documentation clearly to find the flaws and examine the possibilities, opportunities and analyse the risk involved, problems, solution and the product presented. It is very important to analyse if the product or service is something that would fulfill the demand in its marketplace and the value it can bring to the community.
3) THE ROADMAP
An idea or a company will never grow on its own likewise it will neither rethink the strategies layed out initially to grow the company. The last think any investor would want is a company with no future plans. A roadmap is a simple visual representation that shows the future plans of expansion the company has. An investor must go through the roadmap to know what is going to happen to the invested money one year down the lane.
4)COMMUNITY COMMUNICATION
The team must be in frequent communication with the community built around the idea, illustrate their accountability to future investors. This is usually accomplished through social media or their own blog. Check out the project on the Announcement (ANN) thread on Bitcontalk.org, a forum where the crypto-community share their insights on Bitcoin, Ether and other cryptocurrencies. The project should usually have a new announcement on the Altcoin ANN thread, disclosing all the relevant and necessary information that you would require.
5) TOKEN DISTRIBUTION AND THE TYPE OF TOKEN
Every ICO have their own dedicated token.If the value of each token is relatively high, and there are billions of them in circulation, the company’s funding goals are unrealistic. Also it is important to know the type of token we accquire whether it is equity token, utility token or asset token. Greed can be defined by a high token distribution to the team members, let’s say, more than 50% of the tokens is suspicious.
WRAPPING UP
This article is just an minimal insight into the different aspects we have to look for in any ICO, In the coming days i will write articles reviewing different ongoing ICO. If you want to know more about ICO's take a look at my article ICO FOR BEGINNERS https://steemit.com/busy/@uberfreelancer/ico-for-dummies-like-me-beginners-guide-to-initial-coin-offerings
