Rule of choose best ico
Rule # 1 - Choose the Right Sized Projects, focus on value and avoid projects with too much hype
When it comes to sizes, it appears that there is a "golden range" where projects are not too small and not too big. This range is statistically proven to be in the $2M to $10M. Don't forget that ICOs are start-ups in nature.
Google was founded in a garage and was later on funded with $1M USD. Generally if the project and the team are good, any raised amount in the range between $2M and $10M would be more than sufficient to build the project and to get to a point where they can make a proof of concept. And in the same sense if a project is bad or the team is made up of idiots, giving them $232 Million is not likely to solve any of the problems.
Don't forget that this is the initial funding that the company needs to deliver their project. Once they do, they should scale up their operating revenue according to the size of their business.
By eliminating hyped/over sized projects you eliminate a big amount of the "pump and dump" risk factors and a lot of the "noise". Not that smaller projects can't sell to whale investors, it's just that it is much less likely. You also lower the regulatory issues, because with big projects there are a lot more legal risks because they also attract more attention and have contributors from a much wider spectre.
In addition, team founders will not be incentivized to work towards improving their token value, because If they raise $232 Million before the project starts, then they would have already made a fortune that would definitely have an impact on their motivation and focus.
Rule # 2 - Analyze the team and make sure they are already successful
If the team founders don't have any other successful businesses - ditch them! Make sure the founders are business oriented. They must have proven already with other projects in order to be eligible for your money. Otherwise it would be something similar to throwing money at someone who has no idea on how to develop a business from scratch. Doing that will not make him learn how to do business. Also if they are successful, it would imply that they are not likely to commit any illegal stuff as they have a reputation and a life to lose.
By choosing a successful, experienced and business oriented founders team, you greatly increase your chance of success. This by itself is the most important value metric, but I place it at #2, simply because of the regulatory risk associated with #1 which can easily ruin a good project regardless of the founders experience.
Rule # 3 - Avoid projects with big "Dark periods" in their road-maps
The concept of ICO is to launch a cryptocurrency that would be useful and widely adopted. This is possible only through a service which should be innovative, disruptive and with high and immediate value to the retail users. Waiting 1 year to get an alpha version is not acceptable.
Ideally you should be able to get a feeling of the service during the ICO itself and be able to spend your tokens immediately after the end.
Rule # 4 - Make sure there is a reasonable Hardcap, any unsold tokens - destroyed and that there won't be any future offerings
With current abundance of ICOs it is becoming much more often that projects don't meet their hardcap. This is generally not a negative signal as long as the raised amount is over $2M, as like already mentioned, a group of smart people will perform better in the long term with $2M than a bunch of idiots with $232M.
This is why it is extremely important the token holder to destroy all unsold tokens immediately upon finalization of the tokensale. This will ensure that the supplied amount of tokens will be corresponding to the demand of the market and that its economy will be in balance.
Also making sure there won't be future offerings on the same token. This gives you protection against oversupply and this way the price can potentially go up as high as 500% - 1000% increase within a year.
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Thank you for sharing that! That's are indeed the most important things in the ICO selection process.
I just want to add that if someone does not want to give you detailed information, then there is a signal to not invest!
