When the rise of criptocoins won the world last year, second to wave came together the ICOs. An acronym for Initial Coin Offering or Initial Coin Offering, the ICO is basically a token or a criptocoin. But how to evaluate an ICO? In an article in Medium, the Alt Coin Magazine prepared a guide to evaluating an ICO.
Different from an IPO
ICOs are not the same thing as IPOs. The only similarity is that both of them present to the public an investment opportunity. However, there are many differences among them. For example, an IPO is usually made, on average, 10 years after a company is already on the market. On the other hand, and ICO is made at the initial stage of a business.
The ICOs tend to be more profitable than the IPOs, whereas, when investing in a company at an early stage, it is possible to buy the tokens or coins with very cheap rates. But the companies that do IPOs only allow that venture capital investors and angels investors invest at an early stage.
How to identify a good opportunity?
Firstly, in order to invest in an ICO potentially profitable, it is necessary to know where to look for them. Check out a short list of websites that keep updates on the future ICO and the ones in progress:
A white paper is a document that contains six key parts, which are the following: the current problem of the industry, the proposed solution, the technology to be used, the company script, the team behind the idea, the token, its use and its economy.
Once the problem that the company wants to solve is recognized, it is possible to do more research and conclude what are the chances of success of the proposed solution.
Therefore, once it is realized that the solution is good enough, this can be a positive starting point. Then, it is necessary to conduct a thorough search on the project team. The best way to implement this is to look at the LinkedIn profiles of the major participants of the projects. In this way, it is possible to have a clear idea of how much the team has experience in the field in which your project is based.
When it´s time to choose in which ICO to invest, it´s important to keep an eye and figure out if the company aims to solve a problem that already demands special attention. In addition, it´s worth examining also if there are other more established companies as competitors who act in the same focus. Thus, the tip is to look for ICOs willing to practice a unique solution.
Advisors and Partners
If a project has a group of consultants with experience in raising companies of millions of dollars, that’s a good sign. In addition, projects that have partnered with renowned companies also indicate that they have great potential
Private sales are intended to target venture capitalists and angels investors. Therefore, if there are big names associated with the private sale of a project, the ICO has a high probability of obtaining good results.
Checking the comments from people interested in discussion forums. Sites such as Reddit, the BitcoinTalk, the Coincompare, can also yield important information about the ICO. With this, it will also be possible to obtain different perspectives of the ICO, from different points of view.
When starting the search for ICOs, it is recommended to assess the presence of the project on social media platforms. Therefore, a good number of followers on Facebook and YouTube, as well as large groups in the Telegram, and a site with a high number of viewers are considered benefits to the ICO. In addition, poorly marketed social media projects and with low range of followers are not a good call.