Initial Coin Offerings have been the best source of fundraising for the new digital currency startups.
Initial Coin Offerings started in July 2013 for the first time when Mastercoin started first token sale of its tokens which were based on ethereum blockchain.
They raised $2.3 million in 12 hours which accounted for a total of 3700 bitcoins at that time.
Initial Coin Offering is a means of crowdfunding mainly revolving around cryptocurrency which has became the source of raising capital for the start-up companies.
ICO's have been the controversial means of business and some countries like China and South Korea have banned raising capital through initial coin offerings.
With a huge number of ICO's running at the moment, it is very hard to choose a right ICO and invest in it.
There have been a lot of scams lately but if you choose the right ICO, the returns could be life changing.
Some of you might be aware of the fact that some people have made millions of dollars by investing in the ICO's, and when I say ICO's, I mean the right ones.
I have personally invested in three ICO's till date and returns were huge with the least successful ICO giving a 4x return.
You also need to be aware of the fact that you might also loose your capital if the ICO you invested in turns out to be a scam.
How to choose the genuine ICO!
There are a number of ways to know whether an ICO is is genuine or not:
Read the whitepaper carefully
Whitepaper is the face of every ICO or cryptocurrency.
If should be well written and whitepaper itself should be compelling enough to attract the investors to invest in the product.
Know the team
It is very important to know the people behind the project because the team plays a huge role in the success of an ICO.
Look at the team members and their public profiles and see if they are active or not.
The most important thing to know about the team is their expertise in the field.
Know the concept
Dig deep to know what is the concept of the company and what they are trying to accomplish.
Go for the concepts which are new and which you think will add value to the world and solve real world problems.
Marketing
See if the company is doing enough promotions for their product as marketing plays a huge role in the success of any concept.
Technology
You can also evaluate the technology by knowing if they actually have the "proof of concept".
Proof of concept is really important as you will be aware of what they are trying to achieve.
These are some of the precautions you might need to take before investing in an ICO.
All the images are from Pixabay.com.