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What Is ICO Cryptocurrency?
ICO (Initial Coin Offering) is a common choice of fundraising for cryptocurrency startups. This involves the company putting a part of its future crypto tokens on sale in exchange for initial funds. This is beneficial both for the company and for the token buyers.
The ICO gives a startup a perfect and affordable way to raise money to carry their project requirements, while at the same time, strategic investors get an opportunity to invest in a market where a high return on investment is almost guaranteed. Or is it?
In the past few years, crypto startups have managed to raise funds in billions of dollars and presently, it is being considered the most effective way to raise money for a new company.
However, not all ICOs are alike and not all ICOs can guarantee you an assured return on your investment. Therefore, it is important to choose and invest in a good ICO.
Here are a few tips for Investing In ICOs. You will also find here some reasons why you should consider investing in an ICO?
Things To Consider Before Investing In ICOs
Know that you are not actually investing in a cryptocurrency, since the currency has probably not been launched yet, but in the idea behind that currency. So, the first thing you need to do is try to figure out whether the idea is worth your money.
Does the company/idea provide a Blockchain based solution to a problem which cannot be solved otherwise? If not, then the public would probably not be eager to adopt it.
Does a similar solution already exist? If yes, then why would someone be looking for the same product unless it has something unique to offer?
The website quality and appearance
You can tell a lot about a company or business just by looking at its website. The level of professionalism on the website, including the availability of proper and right information, is crucial. Look for the following things on the website of the ICO in which you are considering to invest.
The White Paper – a white paper detailing the layout of the project including all the information, proposal, idea, target market, etc.
The roadmap – If they are serious about the project, they must definitely have a project roadmap (timeline).
The team – a reliable company will always show the team behind the project to increase the user trust.
Website appearance – A company that desires to raise money from investors must be ready to invest in its own website. If they don’t, they are probably not serious about the project.
It is also important to check whether the company has any experience in the particular industry as well in general business market. Make sure that the team members are experienced and qualified in their specific areas. Whether the company has previously managed any multi million dollar business or any projects of the same measure. Who are the advisers, legal team members and investors of the company and so on.
Following are some other points to consider while investing in an ICO:
- How many coins the company plans to hold and how many it puts on sale.
- Whether the company has proper social pages and the level and quality of activity on these brand pages will also tell you a lot about the company’s reliability.
- Search the project/company name in Google for scam alerts and to read the reviews from other users/investors who are associated with the name.
- Also, look out for the past projects of the company. Ask for the same if not mentioned on the website.
- Check out the individual profile of each of the company employees, team members, investors and partners for legitimacy.
You cannot be too cautious when it comes to finding the right ICO to invest in. Cryptocurrency may be one of the fastest rising markets on the internet, but it is also very much vulnerable to fraud. Be alert and take better decisions to find the perfect place for your investments.