Analysis of ICO projects on SCAM

9 points to check if your project is ready for ICO implementation

ICO (Initial Coin Offering) or primary offer to buy tokens is form of fundraising for business projects. ICO is mainly used by crowdfunding projects — companies entering on the market.

During ICO the team sells digital tokens to investors for defined cryptocurrency or fiat money. Funds collected during ICO are usually used for launching some product to the market and business development. At the same time any tokenholder gets immediate profit from its purchasing with some discount at an early stage of crowdsale as well as with future growth of token price because of the demand for them on cryptocurrency exchange markets.

 The ICO project team (founders, advisers, top-managers):

1. Is the information on your team provided?
2. What is the level of team’s professionalism, its experience in cryptocurrency sphere, its project success?
3. What are the team and its members famous for?
4. How active are team members on social media (Facebook + LinkedIn + Instagram + CrunchBase + Github).
   What are their number of friends and posts, the frequency of publications etc.
5. What is the regional composition of the team (local or international)?
6. Who are project advisers?
7. How opened is the team for communication? Do its members respond to messages?

 The technology used for fundraising:

1. Do the pre-ICO and ICO contracts have hard and soft cap of fundraising?
2. Does the ICO contract have an escrow of funds received from investor?
3. Does the contract state unconditional return of money if the lower limit of collected funds is not reached?
4. Are all of contracts available on GithHub?.
5. Does the contract have strict conditions for team and bounty?
6. Does the contract have conditions for unsold tokens with a clear time frame?
   

 The project’s idea and problems you deal with:

1. How simple and realistic is the product’s idea?
2. Does the project have its specific product and users?
3. Does the product solve any problem?
4. Does the project have MVP, anything workable that can be shown to investors?
5. Has the project attracted investitions earlier?
6. Is there any confirmed partnership with other technology partners?
7. How high is the project’s scalability?

 Legality at the US market:

1. How long ago was the company founded?
2. Is the company legally registered?
3. What country is the company registered in?
4. Is the project completely legal? Are there any legal niceties in certain countries?
5. Is the Howey test relevant for you? If yes, do you pass it?

 The token:

1. How many tokens are emitted? What are their economy?
2. Are there any agreement about tokens distribution?
3. How is the token named in different documents: Roadmap, Whitepaper, public offer?
4. How much would the token worth after ICO?
5. Which exchanges would the token bargain on?

 PR, marketing and community:

1. Is the audience active? How many messages per day are at Telegram, Slack or forums?
2. What about the existence of branch at https://bitcointalk.org/
3. What is the number of audience in social networks (Twitter, Facebook)?
4. How high is the traffic on project resources?
5. How is the project glorified in the media? Are there any materials about the project?
6. Are there any refers to the project from competent bloggers and opinion leaders?

 The market:

1. Has the team done an analysis of the potential and target market size?
2. Does the product provide examples of competition at potential markets?
3. How product is different from current solutions?

 Whitepaper:

1. Are all of targets and technical characteristics described at Whitepaper?
2. Does the project Roadmap exist? How do the Roadmap targets relate with general project goals?
   Can they be realized within the projected time frame?
3. Is the document made up fine? Are there any mistakes or inaccuracies?
4. Is the document have any inaccurate wording and terminology misuse?
5. Do you have a clear answer, what the blockchain and token are needed for?

 Investors:

1. Is the information about engagement of iconic investors to ICO reliable, if the company has engaged them?
2. How much money is charged to project account during ICO and where is it from?

Preparing and ICO stages

To understand a potential project interest in cryptocurrency investor’s communities such as Bitcoin Talk, Reddit etc. you have to make a pre-announcement. This is the first but really important stage of ICO project.

1. Pre-announcement is a small presentation, which describes targets and goals of ICO project. It’s kind of feedback with potential investors for product improvement and correction of project business model. For this stage is important to gather the team, learn your competitors, register the company, describe the product based on the idea (Whitepaper), launch a site and mailing.
Final business model and offer are created after pre-announcement.

2. Offer is the detailed proposition about making a deal which contains key conditions for potential investors.

3. Marketing campaign.
Most of the ICO projects are produced by little known companies, so professional ICO marketing is important on the stage of ICO launch preparation. A competent PR strategy helps to find potential investors and promote the project at the market.

4. ICO implementation.
The final stage of ICO is a production of your own tokens or using one of the current platforms (Ethereum or Waves) and ICO launching.
Crowdfunding company usually airs the minimal funds size at which ICO is considered to be successful. After a successful ending of ICO company fulfil its obligations to investors according to the agreed terms.