Raising Startup Capital Through an ICO

March 26, 2018 by Adrian Thorpe

It does appear that the new way to raise business start-up capital is through an initial coin offering or a token generation event, however that is not always going to be the best course of action for any new company to take.

What any potential ICO investor is going to be looking for is a return on their investment, and they will want to know the ins and outs of the business or concept that is behind any initial coin offering, and will want to get a good understanding of how that coin is going to increase in value, and not only how the business has been designed.

Therefore if you have what you feel is a brilliant idea for a business, then you need to ask yourself is an initial coin offering or token generation event the way forward, and irrespective of how good your business idea is, if you do go along the ICO route you will need to ensure the coins or tokens that you will be selling are going to be factored into your business plan.

You will need to have a clear overview of how the success of your business is going to drive up the cost of those coins or tokens, but if there Is no way that is going to happen, then there is very little chance anyone is going to invest in your ICO, so never be in too much of a rush to launch an ICO!

Way Too Many Poorly Structured ICOs

One thing you are bound to notice when you do set about in your quest to find a handful of potentially profitable ICO’s to invest in, is just how many poorly structured and designed ones there are.

Many of them will of course be out and out scams and that is something that you must be aware of, however there are still lots of people out there who do have some excellent and well thought out business start up ideas and are desperate for the funding to help get them off the ground.

If you do see a reasonable business concept or project that you want to invest in then be aware that it is always going to be the funds that will be raised from selling the coins or tokens that should be put to use in the company that ICO is helping to launch, and some ICOs do have ridiculously high funding goals based on the concept and business idea that is behind them.

So always process with caution for no start up is going to need millions of Dollars for example if they want some financial helping starting up that business, unless they are involved in a  major project, however you will find many ICOs do aim to raise millions of Dollars for something that would cost a fraction of that if you launched a similar company, so if a funding goal seems to high then always avoid in investing in it.

If in Doubt Don’t Invest in an ICO

As you are taking a look at the roadmap and the white paper of any initial coin offering or token generation event that has caught your imagination and interest, if you do come across anything that is not perfectly clear then ask the people launching the ICO for additional details.

Those that are seriously interested in raising finance are going to have lots of different channels of communication and are always going to be eager to chat to any potential investors too.

What you should also do is some background checks on the team that are involved in any project that is looking for funding through an initial coin offering and take a look at any social media profiles they have links too also, for that way you can see how many friends, followers or business acquaintances on those profiles and that will give you an idea of their popularity and interests and business experience too possibly.

If you do come across anything that raises a red flag with you or concerns you about any initial coin offering or token generation event that you do come across then the best course of action you an do is to never invest in them.

There are hundreds of different ICO’s going live all the time and as long as you are prepared to put in the necessary work, time and effort in fully researching them all and doing your due diligence then you will find plenty of them that may be worth investing in for sure.