What criteria do you use to evaluate an ICO investment?

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My ICO Due Diligence Checklist!

When I am looking into a new ICO to invest in I do what I call my Due Diligence Checklist, as not all ICOs are created equal and you have to take the good with the bad if you’re going to invest in this space.
Who are they and what is the purpose?

Visit the ICO listing page, and dive into the details of the website, white paper, terms and conditions. It should be more than just a flashy website and white paper.

What problem this ICO is trying to solve?

Do they provide a viable solution? Or is this a “solution” looking for a problem?

Research the target market. Like evaluating any startup company, ask who the target customer is, the size of the market, and whether it is likely to grow.
Who is this ICO's competition?

Research the competition. What other companies are providing a similar solution? How is the target market solving this problem today? How is this new ICO going to compete with the established players all ready in the game and what setts them aside?
Evaluate the ICO Team

Like analyzing entrepreneurs, what is the team’s background and track record? Are they open and accessible? It should be easy to find the team on LinkedIn and GitHub if the team looks shifty, run away and never look back. Do they have past market experience? This prevents committing the same mistakes over and over again. Remember these people will be managing your hard earned money.

Does the coin have a purpose? Is the coin merely a fund-raising tool with no return for the coin holders? Is the coin structured with centralized control or a decentralized governance? Who will support the coin?

Analyze the economics. How many alt-coins or tokens are being created? Will the software platform generate new tokens? Make sure your investment is not too inflationary, you do not want them to be able to “print money” by creating new tokens indefinitely
What is the road-map for bringing their project to market? Think critically about whether their goals are achievable, based on what they have accomplished to date, and whether they have a working prototype,

Do they have any for projections? Few ICOs have a fully-baked business and financial plan but like any startup, investors should demand one. Make sure their business plan is sustainable, with enough revenue to cover expenses with a margin for growth.

How much is the ICO trying to raise and why? Where is all the money going? How is it being spent? Does a company need $50 million or $100 million to develop and market software?
Timing for Token Distribution

The team members of a good ICO usually connect its token distribution to the project roadmap because every project phase requires a reasonable amount of funding. So you should be suspicious if you discover that team members have allocated over 50% of the tokens. Interestingly, projects with a longer period between the ICO and token distribution usually have higher gain. The break helps to create more hype around the project. For instance, Decent ( 8 months, 350%), Ethereum (1 year, 500%) and Augur (Over 1 year, 1,500%).

Crowd Funding or Crowd Investing?

Depending on the white paper, tokens can have very different properties. ICOs are very often compared to crowdfunding or crowdinvesting on the Blockchain. Most cases are hybrid and don’t fall into either category. As opposed to crowdfunding where the investment is considered to be a donation, ICOs give the supporters the possibility of a return of investment when selling the token at a later date for a higher price. ICOs could be seen as a mix between a donation, investment or risk capital.

Investors get coins for supporting a startup idea. If a startup is successful, the token will be worth more in the future but is usually not a stake in the system. An ICO is similar to an IPO if the token represents a stake in the project. Unlike IPOs most ICOs that have been conducted in 2016 and 2017 didn’t give investors a traditional stake in the startup. These investors can be seen as supporters of a project who are solely motivated by the return of their investment.

What the community is saying about this ICO without a community backing it and having trust in it most likely it is not going to go any where.

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Whats the business idea / concept behind the tokens. How are they planning to offer value proposition to convince potential investors like u to buy them. What problem are they trying to solve? And how blockchain technology will help them in solving that problem? What's the amount of money they r planning to raise Through their ico? They do need to imply scarcity to incite their community to perceive their tokens as rare gems but not too scarce as to limit volume of transactions when they built and launch their tartup and put those coins to good use. Especially if they hit exchange this might limit the volume of trading therefore devalue their coin. Lots of things to think about and consider. By doing lots of research... I mean Google the best ico review and rating platforms out there... once you find the top ones log on to their sites and read their whitepapers, the team behind them, their development road map and the community that is backing them up... those kind of factors among several others should give you good insight on what to expect as roi in return of your hard earned monies.
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I categorize ICO's into 3 main points to review.
1) Problem they are solving - if in a space that has competition what makes them unique. If new, does the white paper detail realistic solutions or is it too 'pie in the sky'.
2) Marketing Plan- Even the best ideas and projects will fail with no marketing plan properly laid out. The marketing team/plan needs to be well executed and active in the community they are targeting
3) Team background. Being as new as blockchain is, I expect people from all walks of life joining in. However, who they partner with for developers, advisors etc is critical.
Outside of those 3 main points; website design, whitepaper, social media accounts and willingness to interact with the community are indicators of a solid team.
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