ICO Investment Guide Part 1 : Things you must know before you Invest in ICO Tokens sales .

nischalarvind (25)in #ico • 7 years ago (edited)

First, make sure you choose a solid project to invest in. Just because a friend gave you a tip or you saw a token being aggressively advertised on Facebook, doesn’t mean you should immediately jump in. You can participate in the logistics industry based ICO called [dafzo.io](https://www.dafzo.io). My goal here is not to promote any ICO just to make you familiar with the whole idea of an ICO, and Due diligence before investing. For the purpose of this article, the exact ICO doesn’t matter, the process will be the same for any. Let’s consider this article as a general tutorial.

check our ICO investment guide 2: How to participate in ICO safe & easy

Carefully examine the project.

Do your due diligence:

Always read the complete information on the ICO project’s website, check out the team and the advisors, the problem they are solving and market size of the industry, revenue model and its proposal solution practicality/real-life scenario.
Always check ICO company details, its legal INC formulation. Where is ICO being offered from? Check ICO jurisdiction and country laws about ICO offering? Country laws or generally google about country stand on ICO. Currently, no country has ban ICO but just issue warnings against as may be a potential scam.
Check if ICO is backed by any VC/Angel investor involved, always see the institutional Investor profile and experience. A good & well established VC fund might indicate a project with a higher chance of success.
Read the project’s whitepaper; if it’s too technical, find an expert’s evaluation or ask one to evaluate it.
Most important check what is the utility of token? Should the token is token just sake of calling it "token"? is token can be used as such? how? where? ignore trading at this point, all token is going to list in exchange, if ICO sold out/or achieve its 50 to 60% of target, but it may not have same value what you bought for.
Always check how you can use their token other than just trading, the more useful function with ICO ecosystem is chances are higher that you end up with good ICO participation.
The token is utility FUNCTION (use oF token in the project for services or goods) or SECURITY( promise buyback, the share of profits etc, make sure these ICO must have a license from Govt. Authority to do so, if not stay away from such ICO they are going to end like DAO).
Check if ICO project team have any past experience and background in the same industry? Does the team already have a beta or alpha stage product?
Any Unique proposition of ICO is backed by patent or design rights? this can put Project ahead of the competition. An example is a Hybrid blockchain by IBM.
A solid working product, or at least a proof of concept, might mean the team is serious and potentially already ahead of their competitors in the space.
Carefully examine the ICO terms and conditions: Has there been a large pre-sale discount? what stage? ICO dates and discount offers? Are the total market cap and the number of funds being collected realistic and reasonable?
What’s the project roadmap like? Does it appear realistic, or is it just a wish list?
What’s the team’s plan for spending those ICO funds moving forward?
Check out ICO ratings on ICOHOLDER or ICOLINK or TRACKICO there are many ICO rating website, check where they listed and their rating anything 4 or above is good.
if ICO is already or proposed to get listed on some exchange ? have they disclosed exchange names? ideally, 99% ICO listed post-ICO ends in a listing. Check if they listed before check what kind of exchange are they listed?
Go to project’s social channels and blogs: Are they updated frequently? how active are they? Are they run professionally?
See what social channels are saying. Check Slack, Reddit, Telegram, facebook, medium, steemit and more, but be wary that there will be lots of unreasonable shilling for the project, as well as just plain clueless comments. Use common sense; if something feels off, stay away from it.

Understand the risks before going in.

Possibility you need to consider BEFORE BUYING MOSTLY ICO STAGES ARE PROOF OF STAKE that means they are just on paper called “white paper” or maybe at an early development stage.Also, you need to understand that 99% ICO is working with new technology Blockchain, so it possible the ICO team is not good and experienced that they may not able to complete the project or delay the project as expected. So, If you buy, say, a thousand dollars worth of tokens, be prepared to lose a big chunk of it or even your entire investment. This does or doesn’t happen; not all ICO-issued tokens will jump tenfold in value, but over the time of short period, some may be like steemit or Neo or IOTA or many likes this and even the rare ones that do won’t necessarily stay there at all.

Never invest more than you’re prepared to lose when investing in ICOs, understand that this is the riskiest possible type of investing. Do not invest your pension fund for the quick buck.Make sure you have calculated High and low of ICO project and you ready to take the hit, it can make you rich but also you can lose all the money.

Before you invest, check what the terms and conditions say for your nationality and place of residence. In China, ICOs has banned altogether but still, some news says china lift the ban, do your own research if your country bans ICO contribution or not or maybe seek expert advice like Financial Advisor or lawyer. Residents of some countries (often the U.S.) may be banned from participating in an ICO other than an accredited investor (see SEC guidelines here). It’s sometimes possible to circumvent this, but this may be illegal and severely punishable by law.