How to Check A Company Before Making Initial Coin Offering
There are many investment opportunities in the market these days. Some ideas may be new to you but it doesn’t mean it is not worthwhile to consider. One new trend is Initial Coin Offering (ICO). ICO has a similar concept to that of the Initial Public Offering (IPO).
IPO refers to the sale of the first stock issued by a company to the general public. IPO is regulated. Startup companies issue ICO to the public. ICO is unregulated. The companies offer ICO to avoid the arduous process of capital raising. In this venture, a percentage of the cryptocurrency is traded to early investors in exchange for payment of other cryptocurrencies.
If you consider this, it is important that you conduct research first. The good news is that there’s Ico Pulse provides ico rating to help us during hard times. This can help you determine which companies are worth the investment risk. You can also personally check and analyze if a company is worth the investment risk by determining different factors. You should look at the following factors:
It takes more than one person to build an empire. You have to know the different people involved in the business. It may start from the founders, co-founders and the Chief Executive Officer. In a team, there should be specialists and technicians.
When a startup firm needs to raise money through ICO, they will create a plan for their white paper. The white paper should include details about the project, needs to fulfill upon the completion, the amount of money needed, the number of virtual tokens for initial investors, the type of money accepted and the period of the campaign.
The company should provide a minimum viable product. Producing a minimum viable product does not cost much. The company should have a plan to increase as the demands rise. If the company does not cope up, it will mean failure.
No investors will invest knowing that the company has legal issues. The investors should put resources comfortably and securely. Check if the company has a legal team on standby to handle potential legal problems in the future.
It is crucial that you know if the company partnered with notable individuals or if it is affiliated with businesses with a bad reputation. If the company is affiliated with businesses with a bad reputation, the investment will be riskier.
Consultants and advisers
The company will provide a list of consultants and advisers. From your end, it is important that you know the reputation of these people because they are steering the money. Knowing that it is in trusted hands can make a difference. If the consultants or advisers have a bad reputation, it is time to rethink.
These things are not bulletproof. Risks are always there but with the right decision, you limit the risk. ICO is appealing to many investors or traders because it offers a high level of volatility. This volatility can be seen positively because the market will come up with appropriate price for the specific asset. It is helpful if you understand cryptocurrencies.