How to Assess the Potential of ICO-startup?
Boom of ICO startups started in 2017 and continues to present time. About 300 ICO startups are launched monthly. On the one hand, this diversity provides an excellent opportunity to choose the most interesting projects for investment. But the problem arises: there are too many projects and you have to spend a lot of time analyzing them. Therefore, it is necessary to develop an approach, a set of criteria by which you as a future investor can evaluate the project.
Having analyzed a lot of ICO-projects, experts of Expert-coin rating agency formed a general idea about "high-quality" ICO-projects. We should note here that each ICO-project is unique and should be evaluated in accordance with the knowledge, preferences and goals of a particular investor. Our company offers only to pay attention to those tips which we consider important.
The first thing to think about is the market for which a product is intended. The problem is that there may be high competition and overcrowding in the market niche targeted by the project. There is a very representative example with crypto-exchanges, which are created every month, despite the fact that there are already several hundred of them, and no more than a dozen are in demand and popular. Of course, a successful project can exist in a crowded market niche too, but a quality project is aware of this fact and clearly describes the market and competition and conveys to potential investors the competitive advantages of the product. In addition, high-quality projects are well aware for whom they make their product. The teams who come up with a product for non-existent consumers or "for everyone" are unlikely to succeed.
Good projects have a business plan and marketing strategy. The project documentation should give clear answers to questions about how the project plans to spend the funds raised, how the finished product will generate revenue, how it plans to capture a market niche. Such information suggests that the founders of the project are entrepreneurs with a strong approach, not a bunch of callow dreamers.
We should also talk about the role of blockchain technology in ICO startups. It is worth noting that many projects don't really need to use blockchain technology. Why does pizzeria or a real estate management fund need a blockchain? Yes, now the blockchain is a magic word that attracts investors ' attention, and its use in the project is no more than a marketing ploy. There's nothing wrong with that. But if an investor is interested in the prospects of blockchain as a technology (not a marketing ploy), first of all he or she should pay attention to those projects where blockchain is an integral part of the project. As a rule, these are cryptocurrencies and all the IT services and applications that are associated with the security of data storage and transactions.
And finally, a team. A promising project doesn't need to have a "star" team. Such stars as Vitalic Buterin or Pavel Durov can't participate in each project. A sign of a good team is a strong experience in the fields targeted by the ICO project. Serious attention deserve those teams, which experience is described clearly enough (in a White Paper and social profiles) and without excessive pathos. Currently it is very fashionable in crypto world to call yourself a "blockchain evangelists" and "crypto enthusiast". If the project team consists of only "enthusiasts" and "evangelists", it is worth thinking whether the team has real experience in what they are going to do.
The question remains how important such criteria as the model of tokenization and the format of ICO (stages, the size of discounts, etc.) are. Yes, all this is of consequence, but only if a project is good for all the above parameters. If the project has a weak product, a doubtful team and there is no hint of a business model and marketing, what is the point to reflect on how many tokens will be reserved or burned after the end of ICO.