Topic: Things to be Check Before Investing an ICO ! (Read 189 times)

finally Ian Balina's recommendation.

Take a look at the team. Are they real people at least? That's a start. Have they been in other icos? Experience counts. What are their goals? Are they innovative, does their project solve an issue or empower? Is the coun useful for anything? And always, always read the whitepaper.

Aside from the regular background checks. One of the best things to see that an ICO is legit is the people behind, supporting it. It doesn't have to be famous but just well-known, that if things got bad you will know where to go. Lately you will see a lot of ICOs having local representatives promoting their ICO in each region, that alone you will know that it won't turn into a scam as you can reach out to them physically. ICOs lately especially the Utility Token ICOs are launching formal events where investors can attend too. You will not only get to know the ICO well but the people behind it, knowing their identities will definitely give you a peace of mind.

Another tip is sensing ICOs that are "To good to be true" false promises and unreal projects are big red flags to identify that an ICO is a scam. There is that gut feel that something is wrong with that ICO and you can sense it when you know what you are looking for.

# 1 - ICO Establishment Team
# 2 - ICO theme on Bitcointalk.org
# 3 - ICO Project Phase and Venture Capital
# 4 - Community and media
# 5 - What is their Token? Blockchain needed?
# 6 - Unlimited / Hard cap
# 7 - Token Distribution - When and How?
# 8 - Whitepaper Review of ICO Projects
# 9 - Quality Code - Githhub
Additional:
Scale and Web reputation rating

A company's white paper should definitely be a main factor in deciding whether or not you are going to invest. They should out line the business model, the problem they're solving/solution, the team, and other credibility to back themselves up. It's important to understand a company before you give them your money.

I think very important whether there is listing plans.
Because we can't fiat unless it listing.

Great list!

I'll add two items,

(1) The utility that the token provides to people who are not already involved in the crypto currency industry/market

(2) The list of exchanges that will be supporting the token upon the ICO. This is tough, most exchanges don't support a new ICO, which is why it's all the more important for quality ICO developers to make sure they line it up. I'm not investing in any coin that I can't dump immediately if I feel the heat around the corner.

Happy investing, don't lose all your money!

Could you tell me the differences between hard and soft cap please?

It is estimated that 46 percent of last year's Initial Coin Offerings failed. Scaming is also a serious issue in ICOs. My advise to you is check the development team of the ICO. Also do some background research on the company's website.

I haven invested in ICO yet so this is a good reading.

Check if their domain name resolves to a real address that matches the location the teams says they are operating from.

Thanks for sharing, that's a decent list. What are factors would you look at ?

Before I invest in any ICO, I must understand the general idea behind the concept and then check out the team. The roadmap is also important to know what plans are in the pipeline.

If I can't understand the idea or come up with use cases in my head, I'll most likely pass up on it.

If you are investing (as opposed to speculating/gambling) you will have to do a lot of research and know the red flags that may indicate a poor investment or a scam. Anyone can buy a professional looking whitepaper filled with empty promises for $100 on Fiver, so you need to look a lot deeper than the paper. Here are a few things to consider:

1. It is critical to know your rights as a token holder. Even if the project is legitimate, the first thing you should check out is if the token has any value at all. I don't know of any tokens that have equity in the ICO, meaning you will not share in any profits of the company. So, unless the token is absolutely essential in the operation of the product or business, it may be worthless.

2. Is the ICO operating legally?

With government regulators scrutinizing the industry, it is a good idea to make sure the currencies or tokens you are considering, are following the rules. This is especially true of any Initial Coin Offerings (ICO), which most regulators agree, meet all the criteria of a security. Without registration with the securities regulators in certain countries (U.S., Canada…), these unregistered security tokens cannot be sold to citizens living there, regardless of where the issuing ICO business is located.

- Were the terms, rights (or lack of), expectations of profit, and the purpose of the token (it’s necessity in project functionality) clearly articulated with no grey areas?
- Where are the project developers located? Is the country cracking down on scams, and do they have consumer protection rules?
- Have they consulted with a reputable lawyer on this project? Is there proof? A quality project that is aiming for global mainstream adoption will have researched every potential legal issue.
- Are they in full compliance of security regulations in the country you reside in?
- Are they operating as an unregistered security?

3. Understand the extreme level of risk and everything about this project that contributes to that risk.

4. If you are really serious about weeding out bad investments...

We have written a FREE comprehensive guide that gives a lot of detail in what to look for and where to find it, when choosing to invest in cryptocurrencies and ICOs. The guide also reveals a lot of red flags to watch out for, that most people aren't aware of. Check it out here and let us know if you have any questions - https://dnotesedu.com/2018/02/cryptocurrency-ico-screening-guide-for-investors/ 

Several important, basic things should be checked carefully before deciding to invest money into ICOs:
1) Ultimate, original objectives of projects: Whether the project help to solve current necessary stuffs of our society or at least in specific branch of one area (like banking system, crypto mining, storage services, etc.).
2) Team of core developers: Their basic information (background, locations, trust, past achievements/ bad behaviours).
3) How much their core developers/ co-founders will get from ICOs from premined coins/ tokens, etc?

Before I go for an Ico I check the team members who have invented this, their knowledge, skill and practical experience related to the project. Usefulness and benefits of this project. How it is different from existing coins. Technology used behind it. Target audience and finally road map.

- PR activities
- Business model

Next one I'm going to invest to lccx.io. It is crypto exchange based in London.

Yes! agreed.

Well for me the credibility of the team is crucial. It is not a problem even they are fairly new to the blockchain. But they should have experience in the market/technology that they represent. LinkedIn profile or a history of the team is critical.
The other point which most people overlook is an MVP. For those who don't know MVP stands for Minimum Viable Product. It means that they should have some kind of prototype or a product skeleton. And a proper roadmap is important as well.

These are the bare minimum for me to invest in an ICO. There are so many ICOs showing up every day, so we have to be very picky.

There is other things to check before investing :
- Team : is it real or not? Check on LinkedIn, send PM message on Linked in to other members of the team, check if the account are new or old... Are they already participate in succesful crypto project? Are they qualified? if the team members don't check or seems odd it will be a bad sign.
- Social Media : Check the presence of the ICO on social media, are their account new or old, do they have older message talking about it? How is the hype on the social media about the project
- Token repartition : check how the token are splitted between the team, the investors...How many token are reserved for the public sale? if it's too low in percent watch it!
- How the raised funds will be used : R&D, Marketing, ...
- Hard cap/ soft cap : Is there an hard cap/soft cap? No hard Cap, soft cap is not good? What will happen if the hard cap is not reached?
- What's the blockchain brings to the project? How it will resolve the problem
- Check some ICO ratings website / youtubers about the ICO (don't put all your faith on them, they will just give a trends). If no one talk about it and the project is several weeks old there is a problem.
- Is there already a product or not?
- Does it seems faisable?? If it's seems totaly undoable, don't bother it's a fake

What Should Be include an ICO & White Paper?

- Promoter’s location
- Problem and proposed technology solution
- Description of the token
- Blockchain governance
- Qualifications of the technical team
- Risk factors

Happy Trading