Engaging in Initial Coin Offering (ICO) can make a difference. Being an experienced investor means not missing the opportunity offered by ICO despite its freshness. ICO is a relatively new term that grew together with cryptocurrencies. ICO is like Initial Public Offering (IPO) and crowdfunding. IPO refers to the stocks released by a company to the public. It is often regulated.
ICO has the same principle but it is unregulated because it is a cryptocurrency venture. Startup companies release ICO to avoid the grueling process of raising capital. Normally, the company will go through the processes required by other capitalists or banks. With ICO, investing will be easier on both parties.
Basically, ICO sells a stake of a company to raise money for operational expenses. ICO is somehow similar to crowdfunding – the companies raise money. However, crowdfunding raises funds for donations. ICO raises funds for the prospective return on investments. If you are keen on the return on investment, ICO is more motivating when compared to crowdfunding.
Before engaging, it is important that you understand the whole process so you will know what to expect in the future. As an investor, you need to research thoroughly so you can invest comfortably and securely. What are the processes of engaging in ICO?
Whitepaper
Before the company offers ICO, it is imperative that they release white paper. A white paper is where the plan of the company is recorded. The white paper consists of what the project is about, the needs of the project for completion, the amount needed to operate, the tokens given to pioneers, type of money accepted and the amount of time the ICO campaign will last.
ICO campaign
The ICO campaign will ensue. During the campaign, the investors will buy the distributed crypto coins using fiat money. The crypto coins are called tokens, which is similar to shares of investors engaged in IPO.
If unsuccessful
If the money raised did not reach the minimum funds needed by the firm, the money will be returned to the investors and the ICO is not successful.
If successful
If the money raised reached the minimum funds needed by the firm, the money will be used to complete the scheme. If the plan is successful after its launch, it could mean higher crypto coin value for the investors.
In choosing a particular company worth investing, you have to know the ico rating and its benefits inculcated in real time. ICO rating will reduce the risk of investment by creating a guide for investors. There are many services that you can consider when you are in the world of crypto investment. Aside from the rating, you have to consider other things like the company’s coin supply, communication channels, personnel, rules, law, and regulations.
As mentioned earlier, when ICO failed to raise minimum fund, the money will be returned to you. Although the company is not successful, at least you can get your money back. It is safer than any other types of investment. If you want to be introduced to the crypto world, this is an excellent place to start.
