As industry experts highlight, Initial Coin Offerings (ICOs) are increasing in number at a very quick rate. In 2017, over $5.6 billion was raised through ICOs. But even more astounding is the fact that over 50% of the ICOs that were launched in 2017 have already failed for one reason or another.
This article outlines a suggested The Seven Pillars of ICO Investing based on years of experience from the team behind it:
Pillar 1 – Team
The main focus of Pillar 1 is the team backing the investment, which needs to be experienced in general coupled with a more specialized experience in Blockchain technology. On top of this, the team also needs to be able to provide great support and knowledge in the market that it is targeting. This is standard marketing practice so no surprises here. However, further consideration must examine how your team can develop the product and how keen they are to work with you in the future.
Pillar 2 – Idea
If the idea behind your Blockchain based ICO is not solid and there is no clear objective of what you would like to achieve, then the rollout will be difficult and will often fail. Thorough research needs to be undertaken to ensure that your idea is feasible and matches the markets that are available at the moment. You also need to ensure that you have something unique to sell. The market is becoming saturated, so the only way you will stand out is if you have something different to offer.
Pillar 3 – Execution
The main thing to focus on once you have developed your idea is to execute it into reality, and this is usually the make or break activation. Not only is the launch important but making sure you are going to hit all future milestones you have set are also important. Time-critical!
Pillar 4 – Legal / Regulatory
This will be the tough pillar to keep up with because it is constantly changing. Regulations in this new industry alter almost weekly, and it is vitally important that you keep ahead of the game and on top of the changes that are unfolding.
Pillar 5 – Tokenization
There is a large amount of ICOs that do not require the Blockchain or even public sale of their tokens. You, therefore, must be very clear and defined on what you would like to tokenize your business for.
Pillar 6 – ICO Structure
As with all financial decisions, the choices you make will depend ultimately on what you would like to achieve. You, therefore, need to decide between ICO Mechanics or the ICO Deal Structure and then take it from there.
Pillar 7 – Price Drivers
These really do need to be considered extensively, and you need to look at Network Volume, Market Leadership, Incentives to Hold, Supply Changes, Profit Sharing, Staking, and Liquidity before going any further.
The above are mere guidelines on how to invest in ICOs right now, but one thing is for sure, this will change over the coming months as technology and the industry develops.