Today I would like to tell you about the method I use for exploring ICO projects and their potential. How to make a final decision to invest or not and where to start your due diligence. There are many different tactics, and details on which you can base your investment decision, some of them may be better and more profitable. Today I will tell you how I do it.
The most important thing is to realize that you are giving your hard earned money to someone you don't know, so don't be lazy and spend your time to explore everything you can find about your potential investment and then spend more time to think about everything and make your final decision.
Where to start
First thing's first, you need to find a list of all available ICOs that are going live at this moment. I usually find about available ICOs through Bitcointalk forum. The reason for this is that I am writing for bounty rewards of different ICOs so I can find more than enough of ICO projects on this FORUM
In your case, it would be even better to find all available ICOs in specializes websites just for that. There is a big number of them so just pick one you like.
Use them just to get a list of available ICOs, and all information that you find on them take with a grain of salt. This kind of websites are being paid to list and promote ICOs so don't expect to be neutral when rating them.
ICO website
Start your due diligence by exploring the website of ICO you are planning to invest in. Follow these steps and try not being misled by fancy words and videos on the website.
First Step: Quality of website
The website does not have to be extra modern, turbo cool and flashy, but it has to be decent, without grammar mistakes and provide you all project data. If you see that there are broken links, blank pages, unfinished or unclear texts and design from 1994 then think again about investing in that ICO.
Second Step: Team
As you probably already know, there is a big number of scam ICO projects at this moment on the market. Usually, those kind of projects are not providing correct team information, so you first need to check this detail. It is expected for all decent projects to have LinkedIn profiles of their team members. Go to the LinkedIn website, and see is ICO you are researching mentioned in their profile. Then read working careers of most important team members, are they connected with a big number of people and when was their profile created. This is the easiest way to find scammers and their false identities. If you find something fishy or unlogical then Google their names and check their pictures on other social media platforms.
After you are 100% sure who stands behind your ICO it is time to see are they qualified to develop everything they are promising in their whitepaper and roadmap. Check universities they finished, their past jobs and projects they participated in. Just use your brain and keep in mind that you are planning to give mone to these people. Try thinking wide and imagine that team working on that project. (Can they do it?) If someone has no school, but it is programming and developing projects for last 20 years then of course that he is qualified for ICO that needs a good programmer.
Find this answers. How big is the team, are they working full time on this ICO and where are their headquarters?
I always put quality in front of quantity, and by now this has proven to be a good rule, but some projects need big teams, and just can't be developed in time with small teams, so think about that. Then check are all team members working just on this ICO project, or that is a just part-time job for them. If the team is not ready to be 100% on this project that you could conclude that they don't believe in its success, so why would you?
Why is important where is team located? For several reasons. First is that different countries look at cryptocurrencies, blockchain and ICO projects with different eyes. Maybe they won't be so extreme and ban them, but they could make real hell for it with different regulations, laws, taxes and so on. On the other hand, some countries could give ICO projects special benefits, as Belarus government did just a few days ago. The second very important reason is in teams future connections and potential partnerships. Even world has become a centralized village, and you can make contact with anyone with just a few clicks, it is still priceless to have a live meeting with a future business partner, shake his hand and have a drink. A project that is based in California or Switzerland has a better chance of success than the same kind of project based in Tibet or Antarctica.
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Third Step: Whitepaper (Don't be that guy)
I know that lot of small investors don't ever read whitepapers of the projects that they are planning to invest in. You have to understand that whitepaper is the hearth of the project. It is a central document of every ICO, and all future actions should be based on it. If you don't even read it then not just you are buying something with your eyes closed, but you don't know how is a project going to develop in future and when is the best time to take your profit. I often find some really important details about ICO just in the whitepaper, and it is not unusual to change my buying decision just on that detail. To make clear one detail about reading the whitepaper. Not all of us are programmers and tech freaks, so it is often almost impossible to understand all details of some whitepaper, but it is important to get a basic idea behind it and compare it with some similar project that is already on the market. So please don't be that lazy guy that's not reading the whitepaper. If you are basing your investments on pure luck, then it is better to go to the casino and have some fun with your money then to invest it in ICOs.
Part II is coming soon.
