Everyone seems to be in the frenzy of investing in ICO's. This is no different than putting money (or lending or investing) in a person or team you have never seen, or will never get to see. There is no guarantee or protection from institutions such as SEC, or SEBI or other regulators.
Before investing in ICO's or anything for that matter here is some caveats.
- Research on the company, its founders and business model.
- Understand the business model and whether this company will ever make money after raising funds from you. If they don't make money in the for-seeable future the markets will eventually treat them as non-promising
- Try to analyze the risk of investing in the ICO versus other avenues - e.g. Berkshire Hathway stocks or other firms listed in the equity markets.
- This is no different than buying a product or a car or any good at a local Walmart or Target. you spend some time looking at alternatives for value.
- The euphoria of ICO's being the new growth vehicle for raising money - especially by posts such as the one that claimed a 24 second raise of capital is very short lived.
- With regular VC funding or IPOs on markets you have checks and balances for any business. For example - illegal/unethical things are never tolerated or there is a team of experienced hands trying to grow the business since they are invested in you.
- With ICO's a company could coolly raise Millions of dollars without an advisory board, because they managed to publicize or market their ICOs very well.