What’s Wrong with Most ICOs and What You Can Do About it

If you’re like me and into cryptocurrencies for a while, ICOs probably make you “moan” as much as me. I mean (most of them) just don’t make any sense at all from an investment point of view.

Anyhow, I find myself visiting ICO sites and this is what usually happens.

What do we have here? Ohh what is this?

Another ICO that presents: “Just an idea”, “Just a concept with potentially some potential”.

Or even worse, It’s a: “there’s no purpose at all to the actual ICO or Token but our soon to be released, or maybe one day to be released amazing product, will make the price of this token go skyrocket deluxe 10.000 times so you should just buy it!”.

Pffffff. just wasted another 10 mins of my time! Who is gonna invest in this?

14 days later.

Let me check this site again, ohh wait they got 20+ million in funding based on “Just a concept with potentially some potential”.

Still, ICOs or actually tokens are potentially the best thing that happened to mankind.

So what’s wrong with it from an investment point of view?

You see, in my previous article, I wrote that for example, startups, are usually funded by Angel Investors and Venture Capitalist firms. If there’s one thing these guys (and especially VCs) do, is their due diligence.

They ask fairly basic questions like:

1. Is this Company previously backed by (another) Venture capital fund (VC firm) and/or Angel investors with a big name?
2. Does the company present its complete financial statements?
3. Does the company give insights in its costs?
4. How much will it spend a month (what’s their burn rate)?
5. Does the company give its financial/growth predictions and/or predictions for profit and growth?
6. Does the company explain its benefits opposed to their competitors (if any)?
7. Does the company have solid strategic partnerships?
8. Does the company have patents?
9. Did the company previously give out any real equity (not tokens or coins) but real shares?
10. Does the company have trademarks?
11. Does the company present its sales plan / marketing plan / go to market strategy in any way?

So while researching over 1,500 coins on CoinCheckup we found that the answer to most of these questions is flat out no or not traceable/not public / or perhaps, just: Why would we?

In other words, you can’t do any basic due diligence on tokens, you can’t see their potential, because information is just not publicly available and/or not there at all so why would we?

This is what’s wrong with ICOs and tokens.

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