How To Evaluate An ICO.
Mir Mohammed Ali Khan
Almost $4 Billion Dollars were raised through ICOs in 2017 alone. And 2018 started with the biggest bang where in January alone TELEGRAM of Russia raised $895 million within 3 weeks and plans to increase its crowdfunding to $1.7 billion this month. Some of the best ICOs I have come across were Telegram, We Power and AUGUR. Augur went from a $1 to $123 within a span of 18 months. AUGUR predicts sports betting outcomes through the phenomenon called WISDOM OF THE CROWD. Even with the crypto market down in the past 3 months, AUGUR is still trading at half it’s all time high, around $50!a token. (Don’t buy it here, it’s expensive and it’s just to give you an example).
This coming year the mean estimates for the fund raising through ICOs will reach above $7 billion. And the way it looks from the Telegram ICO in the beginning of the year, these estimates are very achievable.
Does this mean all ICOs are great ? Absolutely not. Are all IPOs great ? Absolutely not either. But the element of fraud is much higher in an ICO. Why ? Because it is not listed on a stock exchange, the company is usually giving information only on the web. It has no checks and balances on its statements in the so called “White Paper” and the biggest problem of it all is the millions of greedy investors running after it without knowing a thing about the world of technology. BlockChain to these investors is some magical technology where every company using it will be worth a few billion dollars. Nothing can be farther from the truth. BlockChain is in its inception stages. It’s BlockChain 2:0 right now. It’s ERC 20 right now. It’s going to change. There will be many other BlockChain improvements. One I have come to know and am researching is HASHGRAPH. HASHGRAPH is BlockChain 3:0 Leemon Baird out of Texas is the developer. I believe it will be 30 times faster than the BlockChain.
Anyway, that discussion aside. What should you look for in an ICO ?
- FOUNDERS CREDIBILITY.
Most of the fraud happening in the world of ICOs is by unknown companies with a legitimate looking White Paper and some pictures of the founders whose background you know nothing about. Will you send money to a stranger you read about on FB whose address you don’t even know, whose background you know nothing about and who has no track record previously.
Always look for the background of the founders. What have they started earlier ? How many other companies they own or are advisors or directors of ? How many successful ventures are they involved in ? Are they currently sitting on the Boards Of other companies as advisors or Founding Advisors whose credibility and authenticity you can check. What are the names of those other companies and have they had a track record ? The better the founders, chances are that you will not be cheated. A person involved in several reputable projects, with a proven track record in the industry, has a decent net worth and credibility through other projects is not going to raise money to run away with.
- TECHNOLOGY AND THE PRODUCT.
The most idiotic way of looking at the ICOs is by saying it’s BlockChain based. It’s like saying it’s .COM based back in the 90’s and buying the shares. 98 our of the 100 companies listed on NASDAQ having the .COM business plan do not exist anymore. Wall Street will not tell you that. It was a billion times worst than the ICO craze. But since Wall Street messed up and hundreds of billions of Market Capitalisation was lost, Wall Street would rather keep it hushed up.
Look at the product and see if it is a NEED based product that can revolutionise the industry or is it a WISH based product that will never materialise. If the business plan in the White Paper does not simply explain what problem it is addressing, chances are it will not address a problem and give a solution. The problem has to be so BIG and around for so long that addressing it with a solution will create a business on solid footings. Go for specialised ICOs such as Financial services solutions, medical and healthcare solutions, anything that requires expertise of the founders and the founders should have the expertise to solve those problems on BlockChain.
- SIZE OF THE MARKET.
Just because the business is using BlockChain technology it does not mean that it serves the masses. Absolutely not. The problem itself has to be so big and the users of the product being developed have to be so many in the world that if the company comes up with a solid solution it can capture hundreds of millions of users or even billions around the world.
Also make sure that the current platform even of Ethereum BlockChain or any other, It has the ability to upgrade itself into the newer BlockChain technologies that will appear within the next few months to a few years. HASHGRAPH being one of them. Otherwise it will be like you holding tokens of a company that is built using DOS in 2018.
Whatever you do, wherever you invest, make sure that greed is not part of your selection criteria. 9 our of 10 people I talk to these days, even within the field of technology, have no idea what BlockChain is or how many other Chain based technologies are in the pipeline. What this great technology will do or how it will change the world. All they care about is buying some crypto currency, investing in some obscure ICO with no understanding and hoping that their $1000 dollars will turn into a million dollars and even that within a few months.
On a Lighter Note, if you find an ICO that can turn a $1000 dollars into a few million dollars within a few months, please inbox me. Not for my number but so I can slap you silly and bring you back to senses.