The recent advancement in blockchain technology has changed the way we perceive a business. Whether it is the making payments through a Crypto channel or getting funds for your new business, blockchain has covered it all. The technology has provided a common platform for investors and entrepreneurs to come together and make most of the opportunity.
With the first Initial Coin Offering launched in 2013, the world witnessed the potential in blockchain business. By 2016, ICOs were the buzzword in every industry. As a business investor, it is definitely worth looking into the rising ventures. In order to make a large profit, you must look beyond the Bitcoin.
In such a scenario the traditional initial public offerings are an excellent opportunity to get coins at a lower price. These coins immediately rise in value when the ICO is over. However, on the flip side, they might lose value and crash. In such cases, the investors never recover their investments.
Here are a few tips and tricks you can use to spot potential baggers and save yourself from scammers:
The Team Is More Important Than The Business
To understand the potential of the venture, you must do a background check on the team member profiles. Experience in the service industry, and their knowledge in the technical expertise relevant to the blockchain will determine the capabilities. What you should be looking for is the perfect balance between professional and business expertise. Lack of experience Might indicate incompetence which might eventually risk your investment.
Understand The Product
Before investing in the ICO, you must understand the product and its potential. Does this product offer something unique and useful to the market? Identify the target audience and how they will be benefited from the product. Make your evaluations as for how well will the product do in the niche market.
Pay close attention to the proposed Business models and understand the roadmap they wish to follow once their ICO goal is met.
Understand The Tokens
Get a clear understanding of the tokens they offer and what purpose will they serve. Mostly these tokens are “utility tokens” that means specific users on their respective platforms use them.
Utility tokens are the most common but are limited to the specific platform only. This means the user can just trade these tokens on the platform. Such token having few limited usages are hence prone to higher risk as they turn worthless once the platform loses traction.
A famous example of “utility tokens” is Ether. Ether is used to make transactions over the Ethereum platform. The hell in the functioning of the platform and offer more value since they are tradable for other services and can be used to make exchange over any cryptocurrency supported by the Ethereum blockchain network or the ERC20.
Utility tokens add more value to the organization since not only they can be traded, but you can also use them to enjoy services available on the platform.
The relation between the shareholders and the team that goes behind the project is an essential aspect of any ICO. A strong partnership must be established between all the agents that are responsible for the success of the ICO. Robust presale results are one of the good indicators you can look for to understand the potential of the ICO. The technical and business experience of the team behind the project determine how well they are capable of handling tough situations.
Analyze The Sales Route
Review the token sale implementations. Learn what the aspects that affect the success and failure of the ICO are. Understand how you can participate and make the ICO successful. Go through the existing stories of the successful ICOs and what were the turning points that made them successful.
Only after understanding all the aspects of the business and technology you can be sure of advantages your ICO possess. Learn as much as you can and make necessary decisions to shine. Wish you all the luck for your Crypto-venture!