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Alexandr Chevtaev

Tech Entrepreneur | Blockchain Expert | Business and ICO Advisor

How to evaluate an ICO project to invest (Part 1 of 2)

«Easy money, Lambo, moon, I get X100 and quit my job» Wait, wait, wait… Crazy times are gone, but still ICO seems to be a good opportunity to invest.

Today if you want to be a successful investor you need to do your own research (DYOR) on an ICO like (or similar) a professional investor does.

So, how to evaluate a project in the right way?

Making a parallel with traditional venture capital world investing in ICO doesn't make you a co-owner of the company, but you own a company’s token, which is very sensitive to company's success and fails, which means that you really should know how to analyze the project from different perspectives. 

I’m happy to share with you the most popular check points professional investors are looking at when evaluating a certain project.

So, let go!

In Part 1 we will take a look at traditional business aspects company should convince you in to show that they have developed a unique idea, solving a big problem and there is a market for it.

I. Team & Advisors

— Sufficient experience and expertise in the related industry

— Tech team experience is able to execute the product

— Previous startups experience is a plus

— Solid academic background

-  ICO execution experience (advisors). Expecially relevant on early stages.

II. Problem & Solution

— How clear and “painful” is the problem company is solving

— How these problems are solved in today

— How effective suggested solution solves mentioned problems

— The benefits of suggested solution compared to existing ones

III. Market & Customer

— How big is the target market and what is the latest and projected growth

— Who is a potential user (customer) of the product. Make sure that founders have a clear sense of who is their customer and why he will use their solution.

— Go to market strategy. How the company is planning to get first users, what are the first markets to enter and what is the plan to scale

 

IV. Product and technology

!!!DOES THIS PRODUCT REALLY NEED BLOCKCHAIN & WHY !!!

— Benefits of introducing blockchain

— How realistic is the implementation of tech side (this one is difficult to evaluate. But good if the deck documentation is reviewed or validated by recognized tech expert or project’s tech team has experience of introducing similar products)

— MVP

Guys, remember, MVP is not a website – simulator. MVP is a simple version of the product, which solves the main problem company is tackling.

— Market proof of MVP. Has the company has proven it’s MVP and market need in the product?

In Part 2 I will share other important aspects to check like role of token and will be really demanded, exchanges listing strategy, project execution timeline, business model and others.

And guys, remember… >90% of all startups fail as any new business model is always a risk! ICO is not an exception. Please, don’t put your last money in ICO and always DYOR! ;-)

 

Stay tuned,

Cheers

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